I read an article in the latest issue of Harvard Business Review about a study done on business strategies during the last three recessions. The goal was determine the most effective strategy a business can take during a downturn, measured by growth and profits in the three years after the downturn ended.

Here are my thoughts and observation after reading the article, colored by my experience and business philosophy.

1. Even the best businesses feel the pain. Recessions hit both strong and weak businesses hard.
2. Going into the fetal position is the worst strategy. Companies that do large layoffs and big cuts to development and investment budgets fare the worst. A highly defensive strategy is suicidal.
3. Going super-aggressive is not effective either. Desperately reinventing everything doesn’t turn out well during recessions or any other time.
4. Steady, future-minded investment with an extra dose of proactivity is the best strategy during a recession. Companies that invested for the future and didn’t do large layoffs were in the best position to grow during the economic recovery.

My overall takeaway is this: The same measured, proactive strategies that work best during good times work best during hard times too.

• Don’t panic or veer off in untested directions.
• Don’t lay off key people you will need during the recovery.
• Do continue to invest in the company’s future, facilities, and R & D.
• Do make extra effort to be proactive and open to cautious, tested changes.

These strategies will not spare a company from the pain of the recession, but they will move them ahead of the competition during the economic recovery that follows.

I have often observed that good old-fashioned business strategy holds up better than the latest wisdom about how “everything is different now”. Recessions are no exception.