The Recession Battle

Many people today are worried about where the economy is headed. Although at the time of this writing no one in our nation’s capital has officially declared the “R” word, there are enough signs of trouble for me to believe we are in a recession. Here are some key strategies to help your company defend itself against one.

Know the Enemy

Before going into a battle, it’s important to understand the enemy. General George Patton (1885–1945), who is regarded as one of the most successful U.S. field commanders ever, once said, “You shouldn’t underestimate an enemy, but it’s just as fatal to overestimate him.”

Therefore, it’s important to understand exactly what a recession is and to have some notion of how long it might last. Economists define a recession as a significant decline in gross domestic product and other key indicators that lasts for more than a few months—rising unemployment, falling levels of output and investment, reduced retail and auto sales, slowing of housing sales.

When conditions are right, even one major event can send the economy into this downward spiral. High oil prices, for example, are forcing consumers to cut back their spending on clothing, televisions, and cars simply because they are paying more at the gas pump.
At the same time, businesses are scaling back on new strategies, expansion plans, employment, and compensation because banks are squeezing their credit.

Get the picture? Once a recession starts, like an unchecked enemy army, it advances. Every business that sells less buys less from its suppliers, and so on down the line. Then employees get laid off, which means they have less to spend, so they are buying less as well. Unlike the trickle-down theory of supply-side economics, a recession becomes a trickle-up issue where the trickle becomes a stream, and before you know it, you’re staring at the Grand Canyon.

Principles of Military Strategy

Consequently, fighting the momentum of a recession can seem as difficult as holding back the Colorado River! That’s why I consider preparing your business to survive a recession similar to preparing for war. It takes dogged determination and grit, solid strategies, and laser-beam concentration to achieve victory.

To get into the proper mindset, let’s review some fundamental concepts of military strategy, as defined in the United States Army Field Manual of Military Operations (sections 4-32 to 4-39):

1. Objective—Direct every military operation toward a clearly defined, decisive, and attainable objective.
2. Offensive—Seize, retain, and exploit the initiative.
3. Mass—Concentrate combat power at the decisive place and time.
4. Economy of Force—Allocate minimum essential combat power to secondary efforts.
5. Maneuver—Place the enemy in a disadvantageous position through the flexible application of combat power.
6. Unity of Command—For every objective, ensure unity of effort under one responsible commander.
7. Security—Never permit the enemy to acquire an unexpected advantage.
8. Surprise—Strike the enemy at a time, at a place, or in a manner for which he is unprepared.
9. Simplicity—Prepare clear, uncomplicated plans and clear, concise orders to ensure thorough understanding.

Although these principles are written for a military audience, they are surprisingly applicable to business leaders doing battle against a recession. As General Patton notes, “In war, the only sure defense is offense, and the efficiency of the offense depends on the warlike souls of those conducting it.”