Article at a glance:

Learning to love recessions

What are the secrets of companies that emerge from a recession stronger and more highly valued than they were before the economy went south? To see how economically troubled times can be used to advantage, McKinsey studied the performance of 1,000 mainly industrial companies in the United States during an 18-year period (1982–99) that included the recession of 1990 to 1991.

The take-away

Companies that retained or gained market leadership during the 1990–91 recession, our study found, were not afraid to spend their cash reserves on strategic acquisitions. Also, these companies refocused their spending in line with competitive opportunities instead of tightening their belts on operating expenses.