Executives say recession is coming but many remain unpreparedBy The IJ Staff | October 24 2019 10:15AM
New research from global leadership advisory firm, Russell Reynolds Associates, says 96 per cent of executives believe it is somewhat probable or highly likely that a recession or economic downturn will materialize in the coming 12 months. Of those surveyed, only eight per cent say they felt well prepared for the event.
The study surveyed 534 senior executives at companies around the world and across industries. It found only three per cent believe an economic downturn is highly improbable in the next 18 months.
Early preparation is key
“The 2008 downturn show that operations and supply chain and finance functions were among the first to be impacted when the economy soured,” say the report’s authors. “Previous recessions show the importance of early preparation,” they add. Citing additional research from the Harvard Business Review, they point out that companies which have successfully weathered previous economic storms took three key steps: they acted early, took a long-term perspective, and they focused on growth, not just cost-cutting.
Among the recommendations the report makes, it suggests that CEOs preparing for a recession should develop a plan with their chief operating officers, identify gaps within their teams, and address those gaps with effective talent strategies, culture and leadership.
“Weathering an economic downturn won’t be easy, but companies that take steps to prepare now will find themselves on drier ground when the storm hits,” say the report’s authors. “Supply chain and operations functions will be some of the hardest hit. CEOs and boards should start engaging them now to develop a response plan, tap their unique expertise and cultivate the right team and culture.”