The impact of COVID-19 has created a massive disruption for companies worldwide. But this isn’t the first crisis they’ve endured—and it won’t be the last. Lessons from organizations that survived the last economic downturn will help today’s companies stage a comeback of their own.
The global pandemic feels unprecedented and the current business landscape uncharted. Nevertheless, leadership teams searching for crisis-management strategies that address the impact of COVID-19 have much to learn from companies that survived the global financial crisis of 2008.
The last major economic downturn, known as the Great Recession, was more limited in scope than the one that has emerged during the current pandemic. But both crises have hit some of the same industries hard, although with varying degrees of severity. Our analysis has revealed key insights:
Critically, businesses worldwide faced the same existential threat during the 2008 crisis that they are confronted with today during the COVID-19 pandemic. But some organizations did more than merely survive the Great Recession—they emerged even stronger. We call those organizations the Comeback Kids, and their actions during the past crisis offer a roadmap for success in the COVID-19 era—and beyond.
For Comeback Kids, economic crises spell opportunity: they create clarity and urgency around the need for decisive action. Comeback Kids harness this energy to innovate and redesign their businesses.
One example is Sixt, Europe’s largest car-rental company, which was hit hard by the precipitous drop in travel in 2008. Alexander Sixt, the company’s head of strategy, told BCG in early 2020 that the crisis afforded them a unique opportunity, noting, “We were able to inspect our processes in an incredibly critical way without having to explain why, because it was clear to everyone that it had to be done.”
“Asking critical questions, that was one of the best things that happened to us in the crisis of 2008 to 2009.”
—Alexander Sixt (head of strategy, Sixt)
Digitizing Mobility to Escape Financial Crisis
An Interview with Alexander Sixt
One Comeback Kid, international car-rental company Sixt, made a strong recovery after the 2008 crisis. Companies suffering through the current COVID-19 pandemic can learn from the company’s successful transformation.
Read this comeback company’s story
Over the past several years, BCG has published a series of publications to highlight powerful insights from successful turnarounds across a range of industries. A sampling of these stories (some from after 2008) highlight how companies can navigate the impact of COVID-19 and rebuild themselves for stronger performance.
Oil and Gas/Energy
In the late 2000s, when oil prices fell and refinery competition rose, Italy-based ERG pivoted to provide renewable energy. Since then, its EBITDA margins increased from roughly 5% to nearly 50% in 2019—and its share price has outperformed both the Euro Stoxx Oil & Gas 500 and the S&P Global 1200 Energy indices.
Alaska Air Group entered the financial crisis in 2008 with more liquidity than other US airlines. Management’s turnaround plan included expanding coverage by buying Virgin America, focusing on more fuel-efficient aircraft, and reducing operating costs. Consequently, the company saw boost of nearly 1,000% to its share price through 2019.
After the launch of Apple’s iPhone and Google’s Android, Nokia’s share price plunged. In response, the company sold off its handset business and reoriented around network equipment. The company became a leader in that industry, and its market cap increased by more than 500% between 2012 and mid-2017.
Our most recent analysis has identified the companies that have achieved the best financial performance in the 12 years since the Great Recession. This analysis, combined with our extensive research into Comeback Kids and transformative CEOs, points to five specific steps that companies can take to turn adversity into advantage.
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Because most organizations have already launched short-term measures to respond to COVID-19, the challenge now is to build on that progress. Five leadership traits will be crucial.
Many companies were lucky to survive the global financial crisis, but some seized the opportunity to make needed changes. Here are lessons from the top performers.
To seize the opportunities in an economic downturn, business leaders need to move beyond a defensive stance. Here are ten ways to emerge stronger from whatever lies ahead.
Focusing on long-term growth and reinvention is critical even in the face of short-term adversity. The 2019 Fortune Future index, developed in partnership with BCG, shows which companies are positioned to thrive.