One of the most difficult things I had to learn as a young motocross racer was how to go fast through turns. Like most racers, I never quite mastered it. Anyone with a little skill can twist a throttle and go fast on a straight patch of ground. With a little more practice, obstacles like big bumps and jumps are easy enough, too. But the fastest racers fly through turns like they’re on rails, and that’s ultimately what separates the very best from all the rest. Whether the turn is a wide-open sweeper or as tight as a hairpin makes no difference. The key to speed is braking late into the corner, releasing the binders as soon as possible, and then accelerating hard once the apex is cleared. Do this well and the victories will come.
The trickiest kind of turns are the blind 180-degree directional changes at the end of long, fast straightaways. If you don’t know they’re coming they can spell disaster. The COVID-19 pandemic is exactly that kind of turn.
After charging wide open through the longest period of economic expansion in U.S. history, business leaders crested the rise in March of this year and were greeted without warning by an unforgiving about-face turn, pointing them back the other way. Turns like these are easy to blow through, and many companies have. No matter the size, it takes a lot of organizational talent, capacity, and will for a company to change course quickly. Those that couldn’t find the brakes in time to navigate the pandemic’s bend are already filling up the dockets of bankruptcy courts across the country. Of course, getting stopped in time to make the turn doesn’t guarantee success, but it improves the odds dramatically.
So, for companies that survived the stop and are now making the turn, a little racer’s wisdom is in order: drag the brakes no longer than needed, roll on the throttle, and accelerate smoothly.
As it turns out, this is essentially the same business guidance offered by a couple of Harvard professors who studied the fortunes of 4,700 public companies before, during, and after recessionary periods. The companies that achieved breakaway performance coming out of challenging economic times managed the turn like great racers. Their approach was balanced. Heading into the downturn, they didn’t panic and slam on the brakes. They scaled back, but they didn’t cut costs more than their peers. And, as they rounded the corner, the highest performers allocated more resources than their competitors to market-related items. They invested in R&D, new products, and marketing and advertising.
According to the authors of “Roaring Out of a Recession,” companies that win on the other side, “use a recession as a pretext to push change through, get closer to customers who may be ignored by competitors, make strategic investments that have long-term payoffs, and act optimistically to acquire talent, assets, or businesses that become available during a downturn.”
In other words, the brands that come out on top figure out how to go fast through the turns so they can come out ahead on the other side. Winners win in the turns.