Recently, conversations and media coverage on the pending recession have started to send shivers down my spine. Those of us who “worked” through the last recession, aka the Financial Crisis back in 2008, hoped they’d never experience anything like that again. Thankfully, it appears that this particular downturn will be very different. But many of the principles of preparing for and surviving a recession remain relevant.  

Surviving the 2007/2008 Economic Crisis

Back in the 2000s, I was running my own services business with my co-founder, and things were frothy and buoyant, to say the least. Everyone was doing well. So well that businesses couldn’t hire enough talent, and demand for our services was at an all-time high. It was hard work, but everything was on the up; our growth, our hiring numbers and our ROI. 

In late 2007, I clearly remember whispers of soft landings and a downturn started to circulate, prompted by unpopular economists and some of the media. A wise and super smart friend of mine had a word in my ear saying, “Batten down the hatches - it’s going to be rough!“ I remember putting down the phone, turning to my co-founder and saying, “I think we need to listen to that.” It was in stark contrast to the success we were seeing in the business that quarter. 

In March 2008, it was as if the world stopped.

The phone was still ringing, but this time it was to cancel contracts, to stop hiring processes, to cancel training. It was fast and grim. After that, the only time my phone rang was my Mum calling to see if I was OK. It was a horrible time. We had to roll up our sleeves and get stuck in to save our business. 

Today, I’m taking comfort from some of the key differences between this pending recession and the crash of ‘08. I’m no economist, but, by all accounts, the world is going into this recession in better financial shape. It’s anticipated that this will be a “normal” recession, and not a crash.

With that in mind, I wanted to share some learnings that might be useful for anyone hoping to steer their business through the next recession.

‍4 Lessons for Keeping a Business Alive During a Recession

‍1. Remember that Inaction is the Enemy

The sooner you act, the less difficult the task, whether it’s securing more funding for a longer runway, or reviewing current hiring needs, talking early with your bank and customers about credit terms before you’re in difficulty, or updating the team on the current state of play. In a recession, the main delay factor tends to be denial that any change is necessary. We risk putting our heads in the sand like an ostrich and paying a higher price later. 

‍2. Communicate Often with your People

Everyone you work with is an adult. They’re hearing the same news and noise about recession as you are. They’ll be wondering what the plans are for the business. Talk to them. The team, your investors and other stakeholders will all want to hear from you. That conversation really helps share the pain and can be a great source of potential solutions, too.

‍3. Have Personal Supports in Place for Yourself 

This phase in business is hard. You’re working harder than ever and making less progress than you’d like. The general vibe is negative and the mood music is doom and gloom, with the media pouring out bad news all day, everyday. Your good mental health, energy and self-belief is a superpower. A good co-founder is a godsend, but if you’re working solo, ensure you have wise counsel in place who you can talk to and bounce things off. It pays dividends in how you will experience the next couple of years.

‍4. Be People-Centric in All of your Decisions

People remember how they were treated. And, believe it or not, people dislike lack of clarity even more than they dislike bad news. The best investment you can make is in retaining the talent you worked so hard to hire in the first place. Be creative with how you do that and most importantly of all, keep communicating as you go. 

For obvious reasons, I want to leave this piece on a positive note. Some of the most successful and thriving businesses today are the result of profound and invaluable experience gained during the last and previous recessions.

An economic downturn sharpens your business, and forces you to eliminate waste and non-essentials you gathered in more prosperous times. It clarifies your added value, and the real problem you solve for your customer.

By making the right decisions and scanning the horizon, you can not only survive, but emerge stronger and ready to thrive for years to come.

Frankli helps teams build a truly people-centric culture through smarter goal-setting, regular 1:1 meetings and 360° feedback. Learn how.

‍1. Remember that Inaction is the Enemy. The sooner you act, the less difficult the task, whether it’s securing more funding for a longer runway, or reviewing current hiring needs, talking early with your bank and customers about credit terms before you’re in difficulty, or updating the team on the current state of play. Don't bury your head in the sand - accept that change is necessary.

‍2. Communicate Often with your People. The team, your investors and other stakeholders are all hearing the same noise about recession as you are. They’ll be wondering what the plans are for the business. Talk to them. That conversation really helps share the pain and can be a great source of potential solutions, too.

‍3. Have Personal Supports in Place for Yourself. This phase in business is hard. You’re working harder than ever and making less progress than you’d like. Your good mental health, energy and self-belief is a superpower. A good co-founder is a godsend, but if you’re working solo, ensure you have wise counsel in place who you can talk to and bounce things off.

‍4. Be People-Centric in All of your Decisions. People remember how they were treated. And, believe it or not, people dislike lack of clarity more than they dislike bad news. The best investment you can make is in retaining the talent you worked so hard to hire in the first place.

Frankli helps teams build a truly people-centric culture through smarter goal-setting, regular 1:1 meetings and 360° feedback. Learn how.