Can Your Firm Thrive After a Recession? You Bet!
Source: CPA Success
The following includes excerpts from a blog post on March 12, 2010, entitled "How to Beat the Odds and Roar Out of the Recession."
Do you believe in odds? Recent research shows that only nine percent of companies come roaring out of a recession stronger than ever. Where should you place your best bets to prepare your firm? The answers are in the latest issue of Harvard Business Review in an article titled "Roaring Out of Recession."
According to the article, the best bets are on firms that employ these three moves:
- Focus on operational efficiency (smart spending and targeted headcount reduction for efficiency versus across-the-board headcount reductions).
- Investment in developing new markets (leveraging your product/service mix into expanded markets -- geographic, new segments or niches).
- Investments in enlarging the asset base. (In professional services, that is training and development and strategic staffing for new opportunities.)
The article highlights the fact that you cannot "cut your way to success." Organizations that focused on across-the-board headcount reductions or cost cuts actually had the lowest chances of coming out of the recession. Conversely, companies that were too aggressive and over-invested in market-making also had bad odds.
Turns out the winners were those who pursued a combination of the strategies listed above.
To read the entire post, click here.
From CPA Success, the blog of the Maryland Association of CPAs, www.cpasuccess.com, March 12, 2010.
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