Your 2025 Budget is Missing One Key Thing. It's the One Thing Nobody Wants to Think About: Recession

JPMorgan CEO Jamie Dimon once said recession isn't inherently “a bad thing…It's bad for America, it's bad for people who are unemployed, but it's usually an opportunity for JPMorgan." That comment may seem blunt, but it reflects a critical business truth: strategic leaders view recessions as catalysts for growth, innovation, and transformation.

And history backs him up. A 2010 BrandZ Global Brands study revealed that the value of the world’s top 100 brands rose by 4% during the worst year of the Great Recession, even as 86% of industries reduced output.

We may not technically be in a recession today, but the signs—consumer pessimism, persistent inflation, layoffs in tech and finance, tightening credit—suggest the conditions are ripe. Yet, research across decades shows: the right actions during a downturn can fuel long-term dominance.

What the Best-Performing Businesses Do in a Downturn

A landmark study by the University of West Georgia's Richards College of Business reviewed behavior across multiple downturns and found that entrepreneurial cultures, rapid adaptation, and targeted investments separated winners from losers.

Building on that research, and newer findings from Harvard Business Review, McKinsey, and Bain & Company, we’ve synthesized the seven key characteristics of companies that thrive in recessions:

1. Embrace the Downturn as an Innovation Catalyst

“Never waste a good crisis,” Medtronic’s Bill George reminds us. Recessions accelerate digital transformation, business model innovation, and customer-centric pivots.

• In 2008, businesses leaned hard into early digital tools and social media.
• In 2020, COVID-19 pushed massive adoption of e-commerce, remote work tech, and AI.

A 2023 McKinsey study found that firms investing in tech and innovation during downturns grew 10–15% faster than peers within three years.

2. Upgrade Talent Instead of Cutting Broadly

Across-the-board layoffs are the single worst tactic, according to “Chaotics” authors Kotler and Caslione. Instead, thriving firms:

• Reassess roles, not headcount
• Recruit elite talent from competitors
• Focus marketing dollars inward, to motivate and retain employees

Harvard research confirms engaged, aligned teams outperform even in turbulent markets.

3. Stay Customer-Obsessed

Recessions shift consumer behavior fast. The winners stay close to customer needs, often offering:

• Bundled services or lower-cost product lines
• Flexible payment terms
• Proactive outreach and personalization

A 2023 HBR report showed that customer-centric firms are 30% more likely to grow share during a recession.

4. Keep the Brand Loud, Even When Budgets Shrink

Cutting external visibility may save dollars short-term—but often costs share long-term. Research from Bain and the Journal of Brand Management found that brands who maintain or grow marketing during downturns emerge more dominant.

Ad space is often cheaper, while consumer attention remains strong. This is your moment to gain voice while others go silent.

5. Reinforce Your Financial Foundation

Cash flow, debt, and reserves matter more than ever during a downturn.

• Firms with low debt and high liquidity can invest while competitors retreat.
• They can also outlast short-term shocks, from interest hikes to credit freezes.

Sound finances aren’t just about survival—they unlock offense.

6. Digitize to Boost Efficiency

Automation, AI, and streamlined operations improve cost structure and scalability.

• SaaS companies with recurring revenue scaled fast in 2020–21.
• Retailers like Target and Kroger leaned into omnichannel tech to compete with Amazon.

Digital maturity isn’t just a tech issue, it’s a recession survival strategy.

7. Diversify Your Revenue and Supply Chain

Companies with multiple customer types, income sources, and supplier options tend to weather storms better.

• Think: global and local markets, subscription and transactional revenue, dual sourcing of materials.
• Redundancy isn’t waste, it’s resilience.

Quick Reference Chart: How to Thrive in a Recession

Trait/Action

What It Enables

Invest in innovation & digital tools

Long-term efficiency & differentiation

Retain & upgrade your team

Stronger execution and institutional memory

Prioritize internal comms

Morale, focus, and retention

Stay loud with external marketing

Share of voice and customer trust

Strengthen customer relationships

Loyalty and lifetime value

Maintain cash reserves

Ability to invest when others retreat

Diversify offerings and partners

Flexibility in the face of disruption

The Mindset That Makes It Work

Recessions will come and go. What endures is how your leadership chooses to respond. The time to act is before the downturn fully takes hold.

Or as Kotler and Caslione put it:

“Great marketers do not just rebound from crises, they continually reinvent business models and marketing strategies during chaotic times.”

Let’s not just ride this wave. Let’s reshape it.

At Tunheim, we help organizations navigate uncertainty with confidence—and emerge stronger. Let’s talk: pmilan@tunheim.com