Purpose-led businesses can thrive in a recession
Many signs point to the world going from bad to worse in 2023, with record inflation levels leading to further hikes in interest rates and a real risk of an ensuing global recession. As in all financially challenging periods, some companies will not survive. But purpose-led businesses that stay on top of their strategic agenda can thrive.
Research on previous recessions tells us that we can expect people to long for meaning and individual relevance, trust what is familiar, search for simplification, question what is really necessary, deprioritize extravagance, treasure simple pleasures, and above all else, place increased importance on value for money.
These sentiments will both intensify the demand for purposeful companies, and cause clashes between needs and desires. To be deemed purposeful, companies will need to be smart and resolve contradictions when customers are forced into trade-offs that they profoundly dislike.
In an economic downturn, corporate purpose is a beacon in the search for answers to questions such as: How can companies offer health benefits for great value, or great convenience that are also sustainable? How can companies offer premiums worth paying for? And how can they create experiences that bring joy, but are not deemed excessive?
—Value for money is rapidly increasing in importance. There are great opportunities for companies that are bold enough to take on the strategic challenge of solving seemingly contradictory customer needs, like great value and health benefits, or sustainability and great convenience.