Embrace Uncertainty: Growth Strategy for Volatile Markets
The second half of the 20th century, from the end of World War II to 9/11, was a time of relative economic stability in the United States. There were, of course, major economic upheavals in that period, from the oil crisis of 1973 to the US stock market crash of 1987, but these events were a far cry from the catastrophic boom and bust cycles of the 1800s that culminated in the Great Depression of 1929. It seemed, throughout much of the 20th century, that growth and prosperity would continue forever.
Though the 21st century has proven more challenging, we’ve still seen some good times. After the post-9/11 recession and the Great Recession of 2008—the worst economic crisis in the US since the Great Depression—the economy still enjoyed a period of growth in the 2010s. Since then, however, the economy has only become more volatile, with no end in sight. The usual suspects are to blame: pandemic, inflation, high interest rates, labor shortages, labor disputes, climate change, war, political instability, supply chain disruptions.
These conditions make it challenging to maintain a business, let alone grow one, but growth is possible. Instead of waiting for things to return to normal, the successful businesses of the future will develop strategies that bring success in both stable and unstable times. They will be proactive rather than reactive in the face of change, becoming resilient and adaptable.
A Plan of Action, Not Reaction
When an unexpected disaster strikes, there are two ways we can respond: we can take action based on an underlying theory that gives us the tools to meet crises, or we can react instinctively to what’s immediately in front of us without a full understanding of how one action will influence the next.
Many businesses seem to have a plan for economic downturns: cut costs or pass them onto the consumer. Cutting budgets, however, is often a reaction, not a strategy. Making reactive cuts to your business could leave you in a weaker position after the crisis ends. The key to thriving in volatile times is to have a plan that can carry you through good times and bad, building processes that are resilient, flexible, and focused.
For example, when the threat of recession appears, the marketing budget is usually the first one sacrificed to appease the monster. After all, why spend money trying to get consumers to spend money they don’t have? The same logic applies to B2B organizations. If retailers are cutting back on inventory, B2B organizations cut back on marketing.
It seems counterintuitive, but marketing is even more important during a downturn. But just as you shouldn’t stop marketing during a recession, it wouldn’t be all that effective to suddenly start marketing during one, either. If you have a resilient growth strategy that accounts for market volatility, you don’t have to react to a recession at all. That’s because companies that know how to grow know themselves and their unique selling point, they know their ideal customer, and they know how to connect with those customers. They build and nurture relationships.
A growth strategy applies to operations as much as sales and marketing, and one point of stress for operations is the supply chain. If you’ve been looking to diversify your supply chain and build relationships with a variety of suppliers, you’re not only in a good position to suddenly expand capacity during a period of growth, you’re more resilient in the face of the kinds of supply chain issues we’ve seen over the past four years.
Volatility Isn’t Just When Things Go Wrong
That last point deserves more attention. When we think about a volatile market, we probably think of all of those things listed at the beginning of the article: pandemics, recessions, and the like. But a volatile market could just as easily have new customers flocking to your business. Any growth strategy must be able to scale up with you when “volatility” means “explosive growth.”
Meet Uncertainty With Resilience, Adaptability, and the Right Processes
A growth strategy that accounts for market volatility isn’t a matter of making a plan and sticking to it no matter what. It’s about baking resilience into the fabric of your organization so that you’re ready for anything. Some future problems are predictable, and we can plan for them even if we don’t know exactly when they will strike. Other problems will be entirely new. That’s why it’s important to start thinking about your growth strategy today. Is it based on the assumption of certain economic conditions, or is it designed with volatility in mind?
