Companies that move quickly and focus on the future will rebound faster and emerge stronger than before.
The next downturn is on the horizon. Businesses need to get ready now.
of investors expect a recession in the next 24 months.
74%
Read insights from BCG’s 10th annual Investor Survey
Only 14% of companies, on average, were able to boost both their growth and margin during the past four downturns.
But this elite group commanded sizable advantages…
Shrinking EBIT margin
The Stakes Are Exceedingly High
Increasing sales growth
Expanding
EBIT margin
Decreasing sales growth
01
14%
44%
Change in
EBIT margin
8.8%
-4.7%
Revenue growth (CAGR)
Winners Outperformed the Competition in Revenue Growth and EBIT Margin
-4.4pp
2.9pp
+7pp
+14pp
How to Win the Next Economic Downturn
When the next downturn hits, how can your business become one of the few that emerges stronger?
Learn how to find advantage in adversity
To Take Advantage of the Next Downturn, Master Three Steps
Survive
Perform
Thrive
Maintain viability
Build resilience
Increase vitality
Maintain Viability
The 2008 downturn was primarily a financial crisis. Many companies simply cut costs to ride out the hard times.
In the next downturn, however, the main challenge will be identifying disruptive threats and finding new sources of growth.
It’s not enough to just survive the downturn: you also need to be prepared to survive what comes next.
Don't wait for the market to turn. Create an action plan with downturn-ready processes today.
Streamline core operations and leverage digital technology to gain efficiency rather than relying on budget cuts.
Plan for next downturn— not the last one
Act early
See How Agile Ways of Working Provide Key Benefits in a Downturn
Build Resilience
Continuously examine a wide range of possible future scenarios. Maintain financial reserves to keep your options open. Champion diversity and inclusion to boost innovation.
Develop best-in-class organizational change capabilities and embrace “always-on” transformation.
Become flexible
Resilient companies react to unanticipated opportunities or threats, weather shocks to the business, and adapt accordingly.
In the next downturn, one route to greater strength will be through increased agility.
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Increase Vitality
Organizations can thrive only if they have sustainable relationships with the social, political, and environmental systems they participate in.
Adopt a long-term, competitive perspective
The ultimate goal is to increase the organizations ability to explore new ideas, renew its strategy, and achieve sustainable long-term growth.
Average revenue growth
1.4%
4.2%
-0.9%
Average total shareholder return outperformance
Companies with a Long-Term Perspective Performed Better
0.3%
2007–2009 Downturn
Short-term orientation
Long-term orientation
Identify and invest in new growth engines, supporting a balanced portfolio of bets across multiple timescales.
Focus on long-term growth
Accelerate large-scale change
Deliver economic and social value
Push ambitious transformation programs and ensure the long-term viability of the business.
Focus on what BCG calls “total societal impact,” and leverage your core business to address pressing social and environmental needs.
What will it take to win the ’20s?
Explore the 5 Pillars
A leadership agenda for the next decade
read more
For more details, follow our #HowtobyBCG conversation on LinkedIn and Twitter.
Winning the downturn is just one challenge businesses face. Moving past viability to build resilience and vitality will position companies to be ready for whatever comes next.
Discover what it will take to cultivate corporate vitality
02
“
01
02
Discover what it will take to cultivate corporate vitality
Read insights from BCG’s 10th annual Investor Survey
Learn how to find advantage in adversity
See How Agile Ways of Working Provide Key Benefits in a Downturn
Explore the 5 Pillars
read more
#HowtobyBCG
How to Win the Next Economic Downturn
Companies that move quickly and focus on the future will rebound faster and emerge stronger than before.
#HowtobyBCG
The Stakes Are Exceedingly High
Only 14% of companies, on average, were able to boost both their growth and margin during the past four downturns.
But this elite group commanded sizable advantages…
74
%
Winners Outperformed the Competition in Revenue Growth and EBIT Margin
Read insights from BCG’s 10th annual Investor Survey
,
-0.9%
1.4%
0.3%
4.2%
What will it take to win the ’20s?
Explore the 5 Pillars
A leadership agenda for the next decade
read more
For more details, follow our #HowtobyBCG conversation on LinkedIn and Twitter.
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