Page 112 - Accelerating out of the Great Recession

DEFENSE FIRST

1. Protect financial fundamentals.
2. Protect business fundamentals.
3. Protect revenue.

In highlighting these strategies, in this chapter and the next
we will draw on our analysis of three recessions from the past
80 years: the Great Depression, the U.S. stagflation of the
1970s, and Japan’s Lost Decade in the 1990s.
We will examine in some depth the stories of a handful of the
strongest performers of these periods, including such well-
known companies as General Electric (GE), IBM, DuPont, and
Procter & Gamble. We will also look at companies that offer
very specific lessons, such as RadioShack, F.W. Woolworth
Company, McDonald’s, and U-Haul. Examples from Japan
include Shin-Etsu Chemical, Nitto Denko, Asahi Breweries,
and Seven-Eleven Japan. We will also return to the stories of the
automakers that we profiled in Chapter 3.

■ PROTECT FINANCIAL FUNDAMENTALS ■

First on the list of good defensive moves is to protect the finan-
cial fundamentals.

Protect Your Cash Position
Even companies that survived the worst of the downturn rela-
tively unscathed need to keep an eye on their cash position. Our
survey of business leaders shows that nearly all companies are
taking at least some action to protect cash, regardless of how
hard they were hit in the recession.
However, few companies are prioritizing actions to protect
cash or taking a comprehensive approach to cash management.

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