Is a recession a threat or opportunity?

You could argue that the medium or long term prospects of many organisations will be the last thing on the minds of their management teams at the moment.  Cost of materials and transport are rocketing, currencies are fluctuating wildly, share prices are all over the place and I haven’t even mentioned credit or the lack of it.  I was working in the advertising industry the last time things slowed down and remember all the arguments that we advanced for increasing spend and not cutting back like the competition.  Some clients were able to heed this advice and some weren’t and I learned that there is no general rule. I am working with two contrasting organisations at the moment in this regard.  One, Oracle, is talking about encouraging  businesses to avoid succumbing to the trench mentality
that today’s economic uncertainty understandably is provoking. They argue
that with the right support
this could be a once-in-a-lifetime opportunity for innovators and entrepreneurs
to fight their
way out of the downturn with creative products and services.  The other organisation’s cup is half empty (I won’t mention who)  and see a downturn in consumer spending exacerbating an already tight situation.  Innovation is still important but it will be turned towards cost-reduction rather than true creativity.  Which side of the fence do you sit on and what will the implications for your organisation’s future focus?


  1. This is a live issue right now, one that is interesting to me and my readers in the freelance realm. Again, I’m sure that one-solution doesn’t fit all, but, despite the gloom and doom, many are predicting that now is a great time for freelancers as companies cut back on head count and instead hire smart people who can hit the ground running, do the job and move on.
    In the past this would have seemed like a smash-and-grab but I think it’s a real opportunity for the young, the flexible and those with current specialist skills.
    Perhaps the same follows for organisations… the Googles of this world can enter a new space and dominate it within a decade while the lumbering Microsofts and AOLs get caught with pants and pageviews well and truly down.

  2. Hi David
    Difficult times indeed. This is my third recession as a consultant and has all the trademarks of one which will be deeper and last longer than the other two.
    Some of my clients have already started to delay discretionary spending and to cancel projects. Others have started to stop all consulting projects. All in all, a difficult time for consultants.
    Having said that, I firmly believe that the best companies (the ones that consultants want to work with in good times and bad) will respond to the recession by doing things better, not just by doing less.
    One way they will do this is by adopting internal venturing models for innovation, possibly even incorprating elements of customer-driven innovation too. There is plenty of research and best practice that supports the effectiveness of this combined approach to innovation.
    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  3. It’s an obvious point but the companies who have managed the good times, do well in the bad times. While RBS and HBOS have failed, Santander is there to hoover up the pieces and buy market share cheaply. That goes for innovation too. It’s easy to get lazy during the good times. Companies going into the downturn with fresh thinking and modern products must be feeling positive.

  4. I think there is opportunity in recession (yes, the r word….)but it takes a fresh look and deeper understanding of the customer to see it. Most organisations do not have this (and maybe do not need it to succeed in good times) with the ‘voice of the customer’ within the firm fragmented, incoherent and only based on incomplete and outdated data.
    Any shift in customer behaviour (however it arises, recession or otherwise….) should force us to go back and re-connect with our customer and challenge previous assumptions about what they want and how they want it.
    Too many company’s react to a downturn as the trigger to deliver the same product or service for less but in reality it is more complex than this; customer behaviour is not always linear and even if it is, creative thinking and selling can help them to shift the goal posts in your favour.
    There are opportunities to take business away from adjacent spend areas and competitor’s who fail to see the opportunity. In good times customer’s may not feel consolidating spend is worthwhile or they prefer to spread the risk across suppliers but these concerns go out of the window when survival, cost and value come to the fore.
    So, my advice is:
    1.Spend more time with your existing customer’s and get to know how they are impacted by the downturn and current plans to deal with it-look for new insights..
    2.Use these insights to identify new ways to help them beyond current offerings and lower prices and explore areas that they may have previously rejected but may now be open to.
    3. Re-visit your strategy and re-orient it towards the new market conditions – success will go to the agile and the courageous and this may be a better time to change direction than you think.
    Brendan at

  5. Totally agree with going back to customers to understand how the recession (or any changing market conditions for that matter).
    However, there are some givens that will hold true for the majority of companies. Reducing and containing costs is a top priority during such times.
    Along those lines, we’re finding it much less expensive to farm our installed base of existing customers than to pursue new customers.
    This is because people become much more risk-averse during challenging times, and prefer to do business with people they know, trust and have a good relationship with (over the risks associated with doing something new with a relative stranger).
    I’m seeing “installed base marketing” as a trend during the recession – because it works.

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