Strategy: Are you prepared?

Few companies—about 1 in 10—emerge from downturns on a stronger footing than when they entered. So, in times of great uncertainty, it’s always wise to hope for the best and prepare for the worst.

Here are five lessons we can learn from companies that have strengthened their position in past
recessions:

• Invite dissent: Shell uses scenario planning to challenge the status quo, get comfortable with
  uncertainty, and prepare to pivot quickly in response to change.
• Shore-up reserves: Amazon would have gone bankrupt during the dotcom bust had it not raised a
  significant amount of capital right before the crash. Not only does a strong financial position enable
  companies to weather a storm, but also to grow through acquisition when their competitors fail.
• Build goodwill: Citigroup’s investment in customer relationships and community development enabled
  it to grow its asset base faster than any other bank following the 2008 recession.
• Diversify your market base: Lego expanded into Asia and Europe to offset the decline in the U.S.
  market.
• Invest in innovation: During the 2000 recession, Target responded to changing customer needs quickly with new merchandise segments, credit programs, and online channels.

These lessons can be put into practice to accelerate growth in every economic environment. You don’t need
to wait for the next downturn to act. The best time to plant a tree was yesterday. The next best time is now.