This blog is an excerpt from the whitepaper Re-Balance Your Strategy and Think Opportunistically in the COVID-19 ERA
Abstract: The recession of 2020 is now recognized as the worst economic recession since the Great Depression of the 1930s.
Many organizations have had to close their doors with others soon following suit without substantial government intervention. And, it has been only a few months since the initiation of these economic hard times in the USA. For those organizations that will survive, they are looking forward to a long recovery to regain pre-2019 economic levels.
It is during such times of economic hardships organizations need to first, survive the crisis; and second, pursue offensive strategies to position the organization for the new economic reality.
This article addresses the long view focusing on what can be done today to create competitive advantages as the economy inches its way back to economic recovery.
- Unemployment yet to bottom out and currently at 18%.
- The Dow Jones Average hovering around 29,500 (pre economic crisis) and;
- The Dow Jones dropped to a low of 18,591 a drop of 36% from its high.
- Gross Domestic Product (GDP) experiencing a 2.1% growth rate in January of 2020 with an increase in employment.
- April 2020’s GDP is now at -4.8%.t.
There are other economic factors causing concern like: rapidly growing unemployment, nominal income decreasing across the US, and a deficit of 3.8 trillion dollars. What’s the takeaway? The economic and personal risks for both individuals and businesses represent significant challenges that will need to be addressed for the economy to begin moving again in the right direction.
How can business leaders act now to begin moving their organizations forward to both survive this Covid-19 crisis—and take advantage of economic opportunities emerging from US and global markets recovery?
While some companies are reacting to the recession with an arbitrary slash and burn approach to operating costs like taking an “across the board” prohibition against capital expenditures, undifferentiated layoffs and a general paralysis stemming from the uncertainty, others are using this economic crisis as an opportunity to strategically reassess their core business. These organizations are taking actions that will ensure the long-term opportunity to position themselves for eventual recovery. While some are abandoning strategic thinking – others are embracing strategy and planning for the recovery.
Strategy and strategic thinking, when the barbarians are at the door, is not an easy thing to do. It takes courage and conviction that good can come from this risk-filled economy. The challenge is to have the willingness to be honest in the assessment of the organization’s strengths and weaknesses and the courage to reposition the organization to take advantage of a future recovery.
How can executives cut operational inefficiencies without cutting into future core capabilities for growth and viability? Rather than adopting a “slash and burn” or “hunkered-down” approach, executives need to dispassionately manage their vulnerabilities and act to secure their organizational resilience for surviving this crisis.
…you have to remain in the game in order to win.
David Norton , co creator of the Balanced Scorecard