As sales decline, you think about cutting expenses. But it’s also important to prepare for the next upturn.
Case in point: In the early 2000s, Lucent Technologies experienced a major decline in business, mostly due to telecom trends beyond its control.
First, the company slashed its workforce, and then everyone watched to see how CEO Patricia Russo would restore profitability.
Within months, Russo tasked her team with identifying new growth areas, aiming to launch new businesses before the company rebounded. Her goal: finding new revenue independent of telecom-hardware cycles.
The growth team used an outside firm to conduct a short, intense study. Then it unveiled a new services business, later named Lucent Worldwide Service, targeting a diverse customer base. This was a big reason why Lucent later teamed up with Alcatel.
Lesson: Never lose sight of long-term goals, even during a downturn.
— Adapted “Upturn Thinking in a Downturn Year,” Asaf Farashuddin, strategy+business.