top of page

Five Measures to Overcome a Recession

Dr. Kazuo Inamori, an acclaimed business leader in Japan, spoke about the five measures to make it through a recession in the past. I was reflecting on a book containing these points, and they seemed quite convincing. Let me share them with you.

1. Sales by All

The first thing you need to do is to maintain the sales of the company, even in a recession. If any divisions are overstaffed, it will probably be a good idea to transfer some of those people in order to better support sales. There have been cases where, by having production workers experience first-hand the challenges that salespeople face, the two groups arrived at better mutual understanding and appreciation.

2. Put your energy into developing new products

Consider that a reduction in orders can actually free up development time that would not normally be available. If you develop new products during a recession, you can sell them when the economy recovers.

3. Reduce Costs to the Greatest Extent Possible

Efforts must be made to cut costs to an even greater extent than any price reductions. If cost-cutting becomes habitual throughout your company, this will improve operational efficiency, and high profitability will be achieved immediately when the economy turns around.

4. Maintain High Productivity

People in production and development sections may become uneasy when they have less to do than usual, and this may fuel dissatisfaction. So, if sales fall by 1/3, you should also cut production by 1/3 in order to maintain the level of productivity per worker. Unneeded staff on production lines should be transferred to sales, or assigned to tasks such as refurbishment of office and production spaces; whatever things can be done to keep people busy and given them a sense of meaningfully contributing to the company and society. As noted above, getting production staff to understand the hardships of sales can help strengthen the bonds between these two groups.

5. Build Better Human Relationships

Difficult times such as recessions tend to reveal whether managers actually have solid relationships with their employees, sharing in hardships as well as successes. Leaders must strive and demonstrate the determination needed to overcome the recession, working together with the employees as a unified team. A recession will show whether you as a manager have been making sufficient efforts generally, but such times will also let you see which employees are actually prepared to tough things out with you


© 2021 TOPC Potentia All Rights Reserved

bottom of page