How to Survive and Thrive in Challenging Times

Few industries are immune to the effects of the global recession and few anticipated the breadth and depth of the economic crisis. Unprepared, many companies in trouble reacted from the gut, cutting high-paid employees first and realizing too late that their competitive advantage-their top talent-had walked out the door.

Circuit City learned the hard way that knee-jerk reactions about cutting staff can be fatal. When online competitors swarmed into the electronics market and revenue began to fall, Circuit City laid off experienced salespeople. That produced a one-time savings but eliminated the company's distinctive value-salespeople who knew the products well. In November 2008, Circuit City filed for bankruptcy.

This is just one example of a company that reacted in old ways to new dangers. But it highlights a significant fact about corporate survival in this recession: companies must safeguard and develop their critical talent if they want to weather the crisis and prosper in the turnaround. Old ways of thinking about employees as expendable expenses must go.

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