One of the tricky strategic issues for many managers I’ve talked with is “Clearly, there will be a recovery sometime. When should we return to the party?”
- The answer to this question will vary by industry, but it’s important to keep a few key concepts in mind:
Going back to the party before the party is ready to start can be disastrously expensive.
- Many things that are cheap now will become MUCH more expensive as the economy heats up.
- The same can be said of people…the best people will tend to be the first to have multiple opportunities.
- By the time the recovery starts, it’s safe to say the acquisition fire sale will be over.
- Finally, unlike in previous recessions, we have not seen a big inventory build-up in this recession – this means that we should come out of the chute going pretty quickly. Just as the recession got very bad very quickly, it’s quite likely to get good very quickly as well.
For many of us, the recession is likely to be over in a tactical, rather than strategic time-scale. How we plan for the recovery will, however, have a great strategic impact on your company. What are you doing to get ready?