That Herbert Hoover quote from 1930 is how consultants from the Boston Consulting Group chose to begin the seventh in their series of Collateral Damage reports examining the current state of the global economy, titled, “Green Shoots, False Positives, and What Companies Can Learn from the Great Depression.”
Clearly someone at BCG thinks that, far from being near the end of the current recession, there's a strong chance that—like Hoover in the 1930's—we ain't seen nothin' yet. And, even if the upturn does begin in early 2010—an outcome that the folks at BCG haven't written off—they expect it "to be sluggish—as with all upturns after a recession that is synchronized around the globe and preceded by systemic financial stress."
Accordingly, BCG warns that companies and leaders need to continue to be on their guard, and to have plans in place that will allow them to operate in the event of the materialization of a worst-case environment, while also building a solid platform for future growth when things improve. While the three core pieces of advice the report doles out in its conclusion aren't anything that you haven't heard before, like all good advice, they surely bear repeating: control costs, protect revenues, and invest in the future.
It's not difficult to see how much the industrial landscape has changed from the days of the Great Depression compared to now. Technology has improved, making large-scale efficiency improvements less likely, while union power has increased the difficulty in achieving cost savings—at least in some industries. And, at this point in the recession, there can't be too many companies around that haven't at least identified where potential cost savings could come from if things get much worse.
Where most companies—and especially firms currently struggling in the downturn—have a real opportunity to distinguish themselves, however, is in following the third piece of advice in the report: investing in the future. Whether that's a new-look auto industry meeting the growing demand for green vehicles, Apple continuing to invest in new technologies even as it's packing out malls with incremental changes to the iPhone, or even a firm rolling out a new website—as my own company did this week—building for the future starts now. While balancing that against a desire to protect what you already have is a tough act, companies that fail to position themselves for growth coming out of this recession will ultimately be left behind by competitors that took the opportunity.
As the BCG report shows, many of the companies that came to dominate the 20th century built the foundations of that success during the century's biggest economic crisis. So too will the 21st century belong to the companies that master this one.
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