What should your business do in a downturn?

Like many around the world, your business might be staring into a fog of extreme uncertainty. Perhaps your government keeps slapping on new taxes—suddenly, haphazardly. Maybe looming trade wars are giving you sleepless nights. Or it could be that new tech and fresh competition have arrived in tandem to feast on what used to be your lunch.

Then again, maybe the truth is simpler, if harder to face: you just messed up. It happens.

Every business, no matter how storied, stumbles. Turbulence is not the exception; it’s part of the game. Most performance graphs don’t show a smooth climb. They loop and lurch. Margins shrink. Revenue lines—once dependable—start slipping like sand through your fingers. So what do you do when the road ahead disappears into mist?

The instinctive answer is almost always the same: slash. Cut costs. Send people home. Freeze spending. Kill perks. Abandon side projects. The internal language changes, too: from growth to survival; from innovation to austerity. Boardrooms echo with talk of realignment, restructuring, resizing. People begin to walk around the office with their shoulders hunched, waiting for the axe to fall.

But what if your first move was the opposite?

Freek Vermeulen, professor of Strategy and Entrepreneurship at London Business School, makes a case worth serious consideration. In Business Exposed, he urges businesses facing turbulence not to grab the red pen right away. Instead of shrinking your cost base as a knee-jerk reaction, look first at expanding your revenue base. What are the sources of income you’ve ignored, sidelined, dismissed as too small or too off-strategy? In a crisis, those side-hustles might become your mainstay.

That’s exactly what happened to my own advisory practice when the COVID-19 lockdowns hit five years ago. Our traditional revenue streams vanished overnight. Every leadership retreat, every in-person workshop, every corporate engagement—gone. It would have been easy, even defensible, to scale down fast or suspend operations. But we didn’t. Instead, we pivoted—quickly and aggressively—into unfamiliar terrain. Digital formats. Remote advisory. Fast-turnaround learning experiences. None of it was in our sweet spot, but all of it allowed us to keep the lights on, preserve jobs, and—crucially—stay in motion.

Motion, even in new directions, is a powerful antidote to panic.

And on the other end of the scale, the mighty Apple did the same in the 2008 financial crisis. Steve Jobs famously refused to cut staff or budgets. “We’d taken a tremendous amount of effort to get [people] into Apple in the first place,” he told Fortune magazine. “The last thing we were going to do was lay them off.” Instead, Apple doubled down on product development, sharpened its positioning, and invested its way through the storm. When the fog cleared, it was miles ahead of its rivals.

I heard a homegrown echo of that recently from the leaders at East African Breweries. During the pandemic, they didn’t send a single person home—even though curfews and lockdowns hurt them badly. Their bet? That people remember trust. That loyalty shown in a crisis often comes back manyfold. And it did. When demand returned, so did performance—and morale was intact.

These are not just stories of sentiment. They are strategic moves, grounded in a long-term view of human capital and brand strength. But let’s not get carried away. Not every business can play offence in a downturn. You need more than just heart. You need reserves. You need optionality. If you were already skating on thin ice—over-leveraged, under-capitalised, running on fumes—then no amount of bold talk will save you. Downturns are brutal on the brittle.

But if you do have some breathing room, then your first instinct shouldn’t be retreat. It should be to widen the lens. Ask: where else might value live? What part of the market have we dismissed for too long? Which customers, which products, which ideas once seemed too fringe—but might now be centre-stage?

And who might see what you don’t? Your people. Not the top table, but the front lines. The doers. The ones talking to customers, handling complaints, building systems. When tapped with sincerity, your internal network becomes your radar—and sometimes, your rescue.

Prof Vermeulen shares a great example. A software company, faced with a steep drop in orders from its key clients—automakers—decided to ask everyone in the firm to suggest new sources of revenue. Dozens of suggestions came in. Most were mediocre. But one sparked attention. In a recession, people hold on to old cars longer. That means they buy more spare parts. So why not pivot to serve the spare-parts divisions of automakers, rather than their new-car divisions? A niche idea, from deep in the organisation—yet it kept the business alive.

The biggest mistake in a crisis is to assume that panic is a plan. It isn’t. It’s noise. And noise drowns out opportunity. So next time the mist descends, pause. Don’t reach for the axe. Reach for your maps. Ask better questions. Invite others to help you look again. A downturn can be brutal—but it can also be a moment of reinvention.

Cutting might get you through the month. Rethinking might get you through the decade.

(Sunday Nation, 20 April 2025)

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