Successful strategies that helped companies survive and thrive in the great depression

Point to Ponder:

"It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change" - Charles Darwin

Story Line: Successful business strategies during the great depression

By now It is pretty clear that the global economy is in severe recession. The main driver for customer's choice is not between the technical merits of your company's products vs your competitor's products. It is a choice between: To buy or not to buy at all.

As one young man, Michael A. Choi puts it, "Rather than making cosmetic changes in the balance sheet, companies need to focus on fundamental shifts in the way they do business”

Since the toughest economic times of the past 100 years was during the Great Depression of the 1930s, and because experts have drawn many similarities between the conditions that led to the Great Depression of 1930s and current times, my curiosity compelled me to do some research about that period during year end holidays to see if there were any "ponies in the dung heap" of the 1930s.

Actually, it was not all bad during that period. Many companies that were creative, not afraid to try new approaches and had the positive mental attitude did well, becoming stronger and thrived in the future. Most of the successful ones focused on one primary thing: emotional connection with the people. They kept themselves visible to consumers, community and people (brand association).

1. Those companies who not only survived but did well and grew during the Great Depression are those who continued to act as if this was an ultimate challenge in selling and believed that consumers would spend if there was a good value proposition and feel connection with their brand. Those companies didn't wait for public demand for their products to rise, they created that demand even during the most difficult of times.

2. While their competitors were focused primarily on cost reduction, the successful companies stayed focused on advertising as one of the primary means to keep the consumer connected with their brand. The successful companies increased their spending in this area, used the emerging technology of radio to keep visibility to the consumers. Those that disappeared focused too much on cost reduction and thus lost visibility to the consumers about value of their products and brands. Also, consumers interpreted their behavior as lack of staying power and stayed away from those brands.

3. Some other companies used print media to connect with consumers. Radio and printing industries thrived during that period.

4. A very innovative approach in creating an emotional connection with their brand was developed by Proctor and Gamble where they sponsored evening shows on the radio to entertain the masses who were looking for any kind of stress reliever during tough times. These shows did not focus on P&G products but they were called "Soaps." (Forever Young connected to Camay Soap, O'Neill for Ivory Soap). There lies the origin of today's "Soap Operas", a huge cultural phenomenon.

Are there similar opportunities for your current products to create associations with TV shows or internet games or Movie/Cartoon characters and open up a brand new opportunity?

5. A few months ago, Business Week had an excellent article about nine small companies who "All have weathered wars, economic downturns, and changes in technology and society. Moreover, they all endured the Great Depression and emerged intact.” It is a must read to get clues for what we can do in current environment. There are some really good stories about diversification, leveraging resources, helping community, creative payment terms and most importantly staying connected with the people.

Reflection:

1. Are there similar opportunities as a "Soap" for your current products, e.g. to create associations with TV shows, or internet games, or movie / cartoon characters? There is a possibility of a creating a brand new culture and market through association.

2. Where are opportunities to leverage your current skills, experience, process and tools for use in other industries, government affairs?

3. Is there something you can do in the community to make a positive impact and create goodwill?

Comments

[Tom So]

These are some excellent thoughts for the New Year and challenges of economy. There are always opportunities in every crisis.

[Arlene]

Wasn't Charles Darwin who said: Survival of the Fittest?

So now it is Survival of the Boldest and Most Creative.

[sunil]

Actually Darwin's definition of "fittest" was more in the sense of a metaphor than to be taken literally. More details on Darwin's interpretation as being more around "natural selection" than on the literal definition of fitness at the link below.

http://en.wikipedia.org/wiki/Survival_of_the_fittest