Since no one knows what type of recovery lies ahead (i.e. V-U-W-J-L), many naysayers argue against planning, claiming predictions are rarely on the mark – so what’s the point? Well, that might be true, however; most plans either require pivots or evolutions along the way. At a minimum, businesses should run through a few scenarios to get an understanding of what they must do – to be where they want to be – given a slow and long (L-shaped) or fast and short (V-shaped) recovery as well as what triggers implementation of those plans.
Irrespective of their origin (i.e. financial collapse or pandemic), every recession has four phases, each phase influencing human behavior, which in turn impacts the economy.
The four phases of a recession are: The Down, The Drag, The Release and The Recovery.