Is it possible for companies to experience growth during a recession? How can you know when or if your organization is prepared for growth? In this video interview Vivaldi Senior Partner Lee Powney speaks with Vivaldi Partner Jane Hovey about how businesses can evaluate their leadership and changing customer relationships in the face of challenging economic times.
Watch the full interview here:
Current Economy vs. 2007/2008 Recession
The inflationary pressures today are in addition to issues that have been building over the past decade-plus, including increasing wealth disparity, a housing affordability crisis, and decreasing real wages. It’s expected that the middle class will be hit significantly harder than in the previous recession, with consumer brands feeling an impact.
The New Role of the Home
Post-pandemic, consumer attitudes and preferences have changed, with home serving as people’s primary place for work and life. Consumers are reassessing their values, mental wellbeing, and what matters most — and they’re demanding more from their brand interactions.
Can Businesses Grow in Difficult Times? Should They?
“Whether you can grow and whether you should grow at this point in time is a decision made only after a clinical evaluation of your business and the situation your business finds itself in. However, some businesses are in the right position at the right time to continue their investment in growth initiatives.” — Lee Powney
To assess if the conditions are right for growth, evaluate a few key factors:
- Cost-leadership: Look at the value-add for consumers that will actually support a price premium.
- Core competencies of your business: Assess whether they are being fully leveraged.
- New markets: Determine if there are areas that might be under/unserved by your existing services.
- Core customers: Understand their wider lifestyle and look at the customer through the lens of your brand purpose.
Thinking Beyond Your Category
With a strong brand purpose, you can expand beyond your category and find new opportunities.
“Honestly, 80% of the consumer research I see that clients have, I’ve seen before, it’s utterly expected.” Lee explains that most consumer research is done through the lens of a category, which means, “The reality is your competitors are looking at exactly the same data.”
Purpose Must Be Connected to Strategy and Execution
Four criteria to assess if purpose is working for you:
- Role — What would the world look like without you?
- Value — Are you going to be seen as a viable contributor?
- Truth — Is your purpose really going to direct your strategy?
- Gravity — Do your customers, your employees, and others, want to get involved and come with you?
Does Your Organization Have a Growth Mindset?
There are three determining factors:
- Compression – How company leadership can create proximity to issues of growth. For example, celebrating new endeavors the organization is undertaking.
- Process – To what degree do employees feel they can challenge a process and change it to improve the organization.
- Belief – Do employees believe that the organization will celebrate and embrace disruption.
To embrace growth during this time of rising economic crisis, businesses must first honestly assess the state of their business. Widen the lens on core customers to understand what their needs are and embrace new post-covid opportunities. Figure out where you can extend based on your brand purpose. If your business is prepared with a mindset for growth, you can experiment and find new arenas for success.