Operations Leaders Are Pessimistic on Recession

More so than other executives, COOs and supply chain leaders expect an economic downturn, causing significant harm to the business, within 18 months.

CFO | October 24, 2019

The CFO article, "Operations Leaders Are Pessimistic on Recession," featured the Russell Reynolds Associates paper, "Preparing for economic uncertainty: Are your operations teams ready?" The article is excerpted below.

“It’s a universally acknowledged truth: The world will eventually experience another economic downturn. Equally as obvious: Companies that are well prepared for economic turbulence will fare the best when storm clouds gather on the horizon. But knowing these truisms and doing something about them are two different matters.”

So begins a new report from Russell Reynolds Associates that explores companies’ state of readiness to weather a recession. The firm surveyed 534 senior executives, but the report puts most of the focus on the 79 participating operations leaders — chief operating officers and chief supply chain officers.

Perhaps tellingly, only 3% of that smaller group said they believe an economic downturn is highly improbable in the next 18 months. And more than half (53%) of them opined that a downturn is either probable or certain.

Unfortunately, a paltry 8% of the operations leaders said they personally were well prepared to respond to an economic slump. Most of them (70%) said they were somewhat prepared, while 22% said they were poorly prepared or unprepared.

Despite the lack of solid preparedness, only 4% of the operations executives said their company would see no impact from a downturn. One in five said the negative impact would be “significant,” and 38% said it would have a “moderate negative impact.”

To read the full article, click here.

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Operations Leaders Are Pessimistic on Recession