How do you, not just survive, but thrive in the aftermath of a recession where so many failed to do so? The subtitle of this book is what immediately jumped out at me when I pulled it off the library shelf. To be able to say this book provides an answer on how to win in a slow growth economy in just 202 pages is quite a claim considering the struggle of most businesses post-recession. However reading the reviews on the back cover; a variety of CEO’s and executives heap an abundance of praise on this ‘fascinating’ ‘insightful’ book. I was compelled to see if the answers really do lie inside.
The authors use a clear structure to guide the reader through the book with two sections. The leading section focuses on how recessions come about, in particular focusing on the great recession of 2008, and the challenges that emerge from such scenarios. In my opinion this nicely set the scene for the whole book and allowed me to contextualise the theories and ideas to follow. The main section then goes on to outline business strategies for a slow growth economy: firstly defensive and once defence is secured, the offensive strategies. A familiar structure emerges with a chapter containing 4-6 potential strategies backed up with data and specific examples of how companies have used these strategies in previous recessions. I thought this was excellent in aiding understanding and ultimately proving these strategies can be successful. This logical two section approach of the problem followed by the solutions is very pleasing for somebody such as me who likes a book to be easily navigated and fit together as a whole.
Undoubtedly the main reflection I took away after reading this book was that in a recession standing still, waiting for the upturn and hoping the markets will heal themselves is the most foolish approach to take. Instead business leaders should be proactive in adapting to the changing environment and increased competition. From my own perspective on business a company should always be looking for innovative ways to capture segments of the market and striving to create a USP to protect from competition. Therefore I concur when the authors write innovation is a huge offensive opportunity for businesses, but during a downturn in the economy. I wasn’t so sure.
However the authors explain that often research and development budgets are first to be cut in a recession. Consequently less competition for resources means the cost of innovation falls. Coupled with changing consumer needs this allows a business to be the first mover and potentially strive ahead of non-innovating competitors during a downturn. An example given was IBM’s machine developed to automate accounting functions in 1929, during the great depression, in anticipation of increasingly complex business functions in the years to come. Reading this I thought surely innovation is not key to survival whereas something like maintaining strong cash flow is, but having opened my mind to the ideas I understand them, if not fully agree with them.
Being critical of this book it could be said the strategies are biased towards large multinational corporations. Indeed in appendix A the authors recognise all their examples come from public limited companies due to the challenges in uncovering information about private companies. Because of this a small to medium enterprise leader for example may view some strategies as simply impossible. For instance pursuing costly innovation strategies when profits have massively constricted would be madness. Similarly another offensive strategy of the books is to unleash marketing power which again may be unrealistic for a small company. Furthermore there is no guarantee these offensive strategies will be a success, in my experience of the business world there are often failed marketing campaigns which in a slow growth economy could be doubly damaging. Consequently I can see why there would be differing perspectives on the appropriateness of the book.
In terms of understanding and connecting with the book I had little trouble throughout. The ideas and terminology were in line with what a business student would reasonably be expected to be familiar with and the strategies suggested made sense to me. However the underlying theme of the book is economics so inevitably there is some jargon used which I found difficult. Having previously studied economics at A level this was not a major issue although during section 1 there were times I felt lost in the text. Describing the causes of the 2008 recession was a chapter I particularly struggled with. This partnered with an abundance of economic indicator statistics from various countries and sectors made this part quite overwhelming. As a result there were times the book lost my attention. I appreciate some people would be fascinated by the depth of explanation the authors go into about recessions; however I was not one of these. Despite the challenging beginning I think section 2 (the strategies) is accessible for most people and it would not require an in depth understanding of section 1.
I have always thought of recession and the following periods of low growth as a huge negative for the business world. Low consumer spending, low government investment and banks unwilling to lend puts firms in a compromising environment where they will struggle. However as I reflect on this book my perspective has somewhat changed. The positivity throughout is irresistible, the authors see opportunity where others (like myself) see threats. This does not mean the book does not recognise the need to protect its position through difficult times because certainly it does, ‘a good offense is built on a strong defence’ (page 89). Any reader would struggle not to have a slightly more positive outlook on a slow growth economy after reading this book.
I would definitely recommend this book to business students and academics. The theories taught in business schools are essentially put into real life situations in this book with examples. I definitely found familiarity to my beliefs about the business world which makes the book enjoyable. My initial reason for choosing this book was to see if the answers on how to win in a slow growth economy really did lie within 202 pages. In my opinion they do partially. Every business model needs to protect cash position, manage inventory and drive down costs so every business leader would find this helpful but the more expensive offensive strategies I believe are inapplicable to many smaller businesses. Overall a very enjoyable read.
The views in this article represent those of the author. This article is part of the ‘Making Our Work Real’ series.