Ronn Torossian, CEO, 5WPR 

Although many companies responded to the current pandemic and recession by trimming expenses and their workforce to survive, those may not have been the best steps. Companies that outgrew the gross national product in the last recession (December 2007 to June 2009) earned three times more than their competitors both during and afterward and had a 50% higher survival rate. This was based on data gathered by McKinsey & Company. 

The findings suggest that carrying out growth initiatives through tough economic times is essential for survival and even future growth. Pursuing a growth plan during a recession is no easy task, but some of the McKinsey study findings may help. 

This is the most difficult part, but we can learn from the past. The 1918 flu pandemic and recession left a deep imprint from which to learn. Current goals must be reassessed and reset after considering the brand’s momentum amidst current market conditions. It’s not the time for overly ambitious and optimistic goals. However, it is a good time to encourage innovation and an entrepreneurial spirit. 

Other things to assess and consider are an in-depth look at market trends, product lines, geography, and value chain. During the current environment, are there some products that no longer appeal? Which products should advertising be aimed at? How much of a difference, if any, does geography have on-demand or popularity of some products? 

The next step is setting four to six growth themes based on the findings. These could include new products or services, entry into new markets, mergers and acquisitions, partnerships, deeper penetration in some markets, etc. Whatever is decided must also be communicated throughout the organization to ensure understanding and support by all. There must be company-wide alignment. 

As Alexei Orlov of MTM has said, “Having as many employees involved in crafting and carrying out the growth themes empowers them and enhances the chances of success. McKinsey found that those companies scoring in the top 25% for growth engaged at least 8% of its workforce. Some had as many as 20% involved.” 

Another reason for engaging as many employees as possible is because any revised plan will likely require additional resources for marketing, sales, and technology that are scarce during such times. Asking division or department leaders to give up 20% to 30% of their budget can be reallocated requires an understanding and buy-in for the new growth themes. 

Margins must be protected for the core business and brands. As tempting as it may be to cut prices to reach more customers, a better strategy may be to seek out and advertise initiatives that merge growth and pricing within sales.

The new growth themes must have milestones that are measurable so that changes may be made when necessary. McKinsey found that shorter initiatives and milestones were more successful. A third of the transformations were delivered in three months, with 70% by the end of the first year. This isn’t realistic or possible, frequent and close scrutiny is still necessary and should be based on weeks rather than months. 

With this new growth management performance system, brand leaders also need to ensure that overall company goals, growth transformation targets, and functional performance are all operating at peak levels. If not, they need to step in quickly to reassess, redesign, and sometimes terminate parts, if necessary.

About the Author: Ronn Torossian is CEO of leading PR agency 5WPR.