Surfing the business Tsunami
Brouha Marketing’s Communications Consultant, Dominic Cassidy invites you to look back at strategies adopted by companies that successfully navigated the recessions, depressions and market corrections of the last 200 years.
The way ahead is always unclear, but even in periods of great uncertainty opportunities arise for organisations learning the right lessons from history.
Research across seven major historical disruptions reveals that only 9% of companies emerge stronger from significant turmoil, but those that do achieve extraordinary results through specific, measurable strategies (1). This analysis synthesises findings from academic institutions, top consulting firms, and detailed case studies to provide actionable frameworks for thriving during uncertainty.
The evidence shows that current business uncertainty, while significant, combines elements from multiple historical periods simultaneously - technological disruption reminiscent of the Industrial Revolution, supply chain vulnerabilities echoing 1970s oil crises, inflation pressures similar to stagflation, and geopolitical tensions creating wartime-like planning challenges. Understanding how previous generations of business leaders navigated comparable disruptions provides a blueprint for success.
Lessons from history's most turbulent periods
The Great Depression represents the most severe business crisis in modern history, with global GDP falling 15% and unemployment reaching 25% (2,3). Yet companies like IBM emerged as market leaders by making counter-cyclical investments (4,5). Thomas Watson's decision to increase manufacturing capacity by 33% between 1929-1932, while competitors cut production, positioned IBM to capture massive opportunities when the Social Security Act of 1935 created unprecedented demand for data processing. This counter-cyclical approach generated decades of market dominance (5).
Procter & Gamble pioneered modern marketing during the Depression by increasing advertising spending when competitors went silent (6). The company created "soap operas" - daily radio serials targeting homemakers - launching 21 shows by 1939. This innovation in content marketing established P&G's brand presence for generations while competitors struggled to regain visibility post-crisis (6).
World War II created total economic mobilisation that parallels today's supply chain disruptions and resource allocation challenges. DuPont transformed from explosives manufacturer to diversified chemical corporation by embracing both patriotic duty and strategic opportunity (7). The company's willingness to work on the Manhattan Project for just $1 - to avoid war profiteering accusations - demonstrated how reputation management during crisis creates long-term competitive advantages.
The 1970s stagflation period offers particularly relevant lessons for today's inflation concerns and supply chain vulnerabilities. Companies that survived the decade of economic instability - with 11.3% average inflation and interest rates exceeding 20% - did so by maintaining pricing power through differentiation rather than competing solely on cost, diversifying supply chains to reduce single-source dependencies, and building financial buffers to weather extreme interest rate volatility (8).
What distinguishes thriving companies from failing ones
Academic research reveals that organisational resilience operates across three stages: awareness, adaptation, and action (9,10). Companies that excel in all three demonstrate specific capabilities that can be systematically developed.
Financial resilience requires more than cash reserves. The most successful companies maintain multiple funding sources, optimise debt structures for flexibility rather than cost minimisation, and preserve investment capacity for strategic opportunities. Apple's approach during the 2008 financial crisis exemplified this philosophy - Steve Jobs chose to "invest our way through the downturn," doubling down on R&D while reducing non-priority functional budgets by only 10% (11,12). This strategy enabled the iPad launch in 2010, creating an entirely new product category.
Operational resilience demands systematic redundancy over efficiency optimisation. Netflix's evolution from DVD-by-mail to streaming represents the classic case of technological disruption navigation (13,14). The company's leadership recognised that customer convenience - eliminating late fees, store visits, and due dates - addressed fundamental pain points that Blockbuster's optimised physical infrastructure couldn't match. Netflix invested in streaming technology infrastructure years before the market was ready, maintaining flexibility while Blockbuster remained locked into profitable but ultimately obsolete revenue models.
Strategic resilience combines long-term vision with rapid tactical adaptation. Amazon's expansion during the 2008 recession - launching Prime, Kindle, and AWS between 2006-2008 - demonstrated how market-leading companies use downturns to capture share while competitors contract (15). This approach requires what research identifies as "dynamic capabilities": sensing environmental changes early, seizing opportunities quickly, and transforming organisational structures as needed.
The neuroscience of crisis decision-making
Behavioral economics research reveals that crisis conditions systematically distort decision-making through predictable cognitive biases (16,17,18). Organisations that build structured decision-making processes counteract these biases and achieve superior outcomes.
Loss aversion intensifies during uncertainty, causing leaders to focus disproportionately on preventing losses rather than capturing gains (19). The most successful crisis leaders combat this bias through scenario planning that explicitly maps upside opportunities alongside downside risks. Johnson & Johnson's handling of the Tylenol crisis remains the gold standard: immediate product recall prioritising consumer safety, transparent stakeholder communication, and swift corrective action created long-term competitive advantage despite short-term costs (20).
Anchoring bias causes over-reliance on initial information when making rapid decisions under pressure (21). High-performing organisations implement structured decision frameworks - like McKinsey's OODA Loop (Observe, Orient, Decide, Act) - that force regular reassessment of assumptions and incorporation of new information (22).
Groupthink becomes more dangerous during stress as teams seek consensus over critical evaluation (23). Research from Harvard Business School demonstrates that diverse decision-making teams and “pre-mortem" analysis significantly improve strategic choices by systematically challenging assumptions before implementation (24).
Proven frameworks for building anti-fragile organisations
Contemporary research has synthesised historical lessons into actionable frameworks that enable organisations to benefit from volatility rather than merely survive it.
BCG's global risk management research analysing companies across 97 countries during COVID-19 identified that organisations with mature risk management capabilities significantly outperformed competitors (25,26). The 71% of companies with robust risk systems that agreed these capabilities helped mitigate negative outcomes shared common characteristics: central strategic risk management teams, embedded risk assessment in strategic planning, and advanced data analytics for real-time monitoring.
McKinsey's six-dimensional resilience framework provides a comprehensive assessment tool covering financial, operational, technological, organisational, business model, and reputational resilience (27,28). Companies that systematically strengthen weaknesses across all dimensions rather than focusing on obvious vulnerabilities demonstrate superior crisis performance.
Nassim Taleb's anti-fragility research emphasises building systems that gain strength from disorder (29,30). Organisations achieve anti-fragility by embracing controlled volatility to build organisational muscle, maintaining optionality through diversified strategies, avoiding debt-heavy structures that create fragility, and increasing redundancies in critical areas rather than optimising purely for efficiency.
Industry-specific applications and small business adaptations
Technology sector companies demonstrate different resilience patterns than traditional industries. Zoom's rapid scaling to handle 300 million daily participants during COVID-19 required infrastructure flexibility and product development speed that traditional business models couldn't match (31). The company's success came from building scalable architecture before it was needed, prioritising customer experience over short-term profitability, and maintaining product development velocity during crisis.
Traditional retail and restaurant businesses that thrived during COVID-19 disruption shared common adaptation strategies: rapid pivot to omni-channel distribution (click-and-collect, roadside pickup), technology adoption for contactless transactions, creative use of existing assets (converting stores to distribution centres), and value proposition evolution that turned necessity into competitive advantage (31).
Smaller businesses achieve resilience through different mechanisms than large corporations (32). Martin Guitar Company survived the Great Depression by diversifying beyond guitars into violin parts and wooden jewelry, maintaining quality while introducing lower-priced models, and preserving dealer relationships rather than accepting volume discounts (33). Contemporary small business successes like Battery Watering Technologies pivoting from battery equipment to PPE manufacturing during COVID-19 demonstrate how agility can substitute for financial resources.
King Kullen's creation of America's first supermarket in a 1930 Queens warehouse during the Depression illustrates how small businesses can create entirely new market categories during crisis (33). The self-service model with large selections, discount prices, and parking addressed cost-conscious consumer needs while requiring minimal startup capital compared to traditional grocery stores.
Contemporary strategic recommendations
Modern expert consensus from leading consulting firms emphasises four critical capabilities that distinguish high-resilience organisations (25,26,27):
First, implement integrated risk management that embeds threat assessment into strategic planning rather than treating risk as a separate function. This requires central risk teams with real authority, advanced analytics for real-time monitoring, and regular scenario planning exercises that explore multiple possible futures rather than single-point forecasts (34,35).
Second, develop adaptive leadership capabilities that emphasise speed over perfection in decision-making, build self-sufficient teams with clear accountability, foster learning cultures that treat failures as valuable information, and maintain transparent stakeholder communication throughout uncertainty periods (36,37).
Third, strengthen operational resilience through supply chain diversification (geographic and vendor), digital infrastructure investment including cybersecurity, financial buffer creation while maintaining growth investment, and flexible workforce models adaptable to changing conditions (38,39).
Fourth, build anti-fragile systems by avoiding over-optimisation without redundancy planning, creating decentralised decision-making capabilities, maintaining strategic optionality through diversified approaches, and embracing controlled volatility to develop organisational adaptability (29,40).
Quantitative performance indicators and timing
Companies that successfully navigate crisis achieve measurable superior performance: revenue growth 2-3 times higher than competitors post-crisis, market share gains of 10-50% during downturns, profit margin improvements 3 times faster than industry averages, and ROI on crisis investments of 200-500% over 3-5 years (1,41).
Timing proves critical for crisis response success. Companies that act within the first 3-6 months of crisis show the best results, early cost restructuring provides flexibility for later investment, and quick pivots to new opportunities before competitors recognize them create lasting advantages (42). Counter-cyclical investing when assets are cheap, R&D investment during downturns, and marketing investment while competitors reduce spending consistently generate superior long-term returns (1,6).
Implementation roadmap for uncertainty navigation
The research converges on a systematic approach that any organisation can implement regardless of size or industry (43). Start by conducting comprehensive risk assessment across all six dimensions of resilience (financial, operational, technological, organisational, business model, reputational), identifying specific vulnerabilities and building targeted improvements rather than broad, unfocused initiatives.
Establish decision-making frameworks that counteract cognitive biases through structured processes, diverse perspectives, and regular assumption challenges (44,45). Create early warning systems for environmental changes, rapid response capabilities for crisis management, and learning mechanisms that capture insights from each experience.
Build organisational capabilities that enable sensing of environmental changes, seizing of emerging opportunities, and transformation of structures as needed (46). This requires investment in both technological infrastructure and human capital development, particularly in areas of digital literacy, adaptive leadership, and cross-functional collaboration.
The evidence demonstrates that uncertainty creates unprecedented opportunities for organisations willing to act boldly while others retreat. The key insight from over two centuries of crisis navigation is that success comes not from predicting specific disruptions, but from building adaptive capabilities that transform potential threats into competitive advantages through disciplined preparation and agile response mechanisms.
Companies that understand these historical patterns, implement evidence-based frameworks, and maintain both strategic patience and tactical speed will not merely survive current uncertainties - they will use them as launching pads for decades of market leadership, just as IBM, P&G, Apple, and Amazon did in their defining moments of crisis navigation.
Bibliography
1. Harvard Business Review - How to Survive a Recession and Thrive Afterward: https://hbr.org/2019/05/how-to-survive-a-recession-and-thrive-afterward
2. PBS - Brother, Can You Spare A Billion? The Story of Jesse H. Jones: https://www.pbs.org/jessejones/jesse_greatdepression_1.htm
3. Federal Reserve History - The Great Depression: https://www.federalreservehistory.org/essays/great-depression
4. Farnam Street - Luck Meets Perseverance: The Creation of IBM's Competitive Advantage: https://fs.blog/ibm-competitive-advantage/
5. Lochhead - IBM During The Great Depression: https://lochhead.com/blog/what-ibms-experience-during-the-great-depression-can-teach-todays-tech-ceos/
6. Academy of Management Annals - Organisational Response to Adversity: Fusing Crisis Management and Resilience Research Streams: https://journals.aom.org/doi/10.5465/annals.2015.0134