Recessions, depressions and downturns are best known for business closures and financial struggles. They are also famous for creating visionary entrepreneurs and innovative start-ups.
American Airlines, Domino’s, HBO, Mailchimp, AirBnB, Uber… just some of the successful companies birthed during recessions, which can also be fertile times for invention. And here’s some more good news: they can also be good times for reinvention.
Some companies that try to defend the status quo during downturns don’t live to tell the tale (bye-bye Blockbuster, Woolworths, Comet, Toys R Us and Phones4U). The Financial Times recently ran the headline, “Why Visa and Mastercard have yet to face their Kodak moment”. No doubt unsettling for many executives in the two financial giants.
But then think how Kellogg’s thrived during the Great Depression by investing more in advertising, and in its people. Or how Amazon survived the dotcom bust by launching Marketplace and branching into web services.
Lego is a favourite example for Zarina Naqvi CMC ChMC FIC. In 2008, as the US market was tanking, Lego shut its play parks, and instead looked to Europe, Asia and other new markets for growth and profits. “It pivoted successfully and acted on the way the world is now,” says Zarina, founder and director of Maxima Associates Consulting. “It also considered the future and built brands for girls – which has worked, after some trial and error – and moved into even more unusual markets such as film. It’s a tale of keeping pace with trends, buyers’ needs and responding to market forces and opportunity.”
- LEGO’s Play for All accelerator: nurturing neurodiverse talent through play – member-exclusive
- Targeting the underbanked: how Mastercard made diversity a key business objective – member-exclusive
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