Marina Whitman had a great article in Tuesday's Wall Street Journal basically arguing that all the stimulus we're doing now is fine, but when the economy starts to expand, policy will have to shift quickly:
contain the inflationary pressures it is now helping to generate. It
will have to know when to step off the accelerator.
Business leaders can apply this logic to their own companies. Hunkering down will have to shift to expansion. Laying off workers will have to shift to hiring. Conserving cash will have to shift to laying the groundwork for larger sales volumes.
We can argue about the timing of the recovery, but everyone should start some contingency plans for an improvement in the economy. In August 2006, more than a year before the recession began, I recommended that business executives and owners begin contingency planning for a possible recession. (Although I was not forecasting a recession at that time–sorry–I did point readers to Nouriel Roubini's dismal but ultimately accurate forecast.)
Today corporate planning should emphasize contingency planning for an economic recovery. And the four steps I recommended in that old post work as well on the upside as on the downside.