10 Things Organizations Can Do To Survive The Approaching Depression

The warnings are growing louder. Robert Kiyosaki has publicly predicted a "giant crash" in 2026-2027 that could rival the Great Depression, pointing to $39 trillion in U.S. national debt, record consumer borrowing, and what he calls an "Everything Bubble" . While Kiyosaki's timing has been inconsistent before, the underlying data points are difficult to dismiss. The Shiller PE ratio sits above 40—a level seen only once before, during the dot-com bubble . Goldman Sachs CEO David Solomon has warned of a 10% to 20% drawdown in equity markets within 12 to 24 months .

Even ACCA's more measured 2026 Global Economic Outlook describes a "fragile" backdrop with risks "skewed to the downside," citing geopolitical tensions, trade fragmentation, elevated public debt, and richly priced markets  . Former IMF chief economist Ken Rogoff warns of a significant stock market correction over the next three years .

Whether or not the "greatest depression" materializes in full, the prudent organization prepares now. History shows that companies which survive downturns—and some which thrive—share identifiable traits. Here are ten actions to take.

1. Recognize the Warning Signs Before It's Too Late

Bankruptcy rarely arrives without warning. According to insolvency research, a strategic crisis typically begins three to five years before bankruptcy, visible only to insiders. Revenue decline becomes apparent in the books one to three years before the end. The liquidity crisis hits less than a year before bankruptcy .

PwC's financial distress indicators provide a checklist: decreasing market share, revenue, EBITDA, and margins, alongside increasing management turnover, unit costs, competition, creditor pressure, and leverage ratios . Bloomberg's analysis of corporate failures adds more specific signals: bonds trading below 80 cents on the dollar, retention bonuses for executives, companies suddenly talking about "creditors" rather than "shareholders," suppliers demanding upfront payment, and going-concern warnings from auditors .

The lesson: monitor these metrics continuously. By the time liquidity dries up, options have narrowed dramatically.

2. Build Cash Reserves Before You Need Them

The fictional Company B in INSEAD's crisis analysis had "strong financial reserves" that enabled it to avoid layoffs, eliminate overtime, implement sabbaticals, and use government support schemes. It froze salaries—including executive pay—but kept key training intact. Company A, by contrast, had spent years buying back shares to boost metrics and executive bonuses, leaving no buffer. It cut everything, including training, and laid off employees without explanation .

During the last recession, companies that had maintained financial slack could acquire assets and talent at depressed prices while competitors retrenched. Cash and liquid resources are not idle—they are strategic ammunition.

3. Cut Costs Strategically, Not Reflexively

The instinct to slash indiscriminately is dangerous. Former Intel CEO Andy Grove famously observed: "You can't save your way out of a recession—you must invest your way out" .

This does not mean avoiding cuts. It means distinguishing between costs that erode future capability and those that do not. Technology upgrades can be deferred; critical security infrastructure cannot . Product lines should be pruned based on demand shifts toward value and multi-purpose goods. But marketing research becomes more important, not less, when consumers are redefining value .

The Thomas & Betts Company during the Great Depression offers a historical example: it reduced officer and salaried employee compensation by 20% and hourly wages by 20%, but guaranteed the full workforce would be retained at 80% of former wages. Founders took even deeper cuts—less than half their contracted salaries by 1932 .

4. Double Down on Talent, Not Layoffs

Layoffs feel decisive. They often are destructive. Companies that cut training budgets create skills gaps that damage productivity and organizational capacity long after the crisis ends . Research cited by the World Health Organization shows that $1 spent on mental health interventions yields a $4 improvement in health and productivity .

INSEAD's analysis warns of "survivor syndrome"—fear, anger, and lack of loyalty among remaining employees after callous layoffs. High potentials leave at the earliest opportunity . The alternative: involve employees in co-creating turnaround plans. When people feel they have power to make a difference, morale and motivation improve even under difficult conditions .

Economic downturns also offer exceptional opportunities to pick up high-quality talent that would be unavailable in boom times .

5. Maintain Advertising and Marketing—Adapt, Don't Abandon

Historical evidence from the Great Depression is unambiguous. Companies that increased advertising during the downturn often outperformed. American Tobacco increased its advertising appropriation by £1,000,900 in 1930 and increased net profits by £2,500,000. Coca-Cola increased its appropriation by £200,000 in 1930 and saw net profits increase by over a million. Life Savers increased advertising 15% and saw sales rise 149% .

The logic holds: competitors cut back, leaving cheaper and less crowded advertising channels. Consumers at home during downturns are more reachable. Uncertain consumers seek reassurance from known brands .

But strategy must shift. Price elasticity curves change dramatically. Consumers negotiate harder and postpone purchases. "Must-have" features become "can-live-withouts." Marketing should emphasize reliability, durability, safety, and performance over gimmicks. Temporary price promotions work better than list price cuts .

6. Understand That Cash Flow Is King

Reduced cash flow is a primary warning sign of financial trouble. Symptoms include not knowing how much money is coming in or going out, customers paying late, difficulty paying suppliers or debts, and low profit margins .

Cash flow forecasting becomes the central financial discipline. Companies should know exactly what they owe and when, sell excess inventory, and collect receivables aggressively . Working capital management—not revenue growth—dominates survival during contractions.

The Thomas & Betts comparison is instructive: between 1926 and 1931, total current assets grew by 10% while current liabilities decreased by 30%. The company had liquidity. What changed was its composition—cash became relatively more important as sales collapsed .

7. Build Scenarios, Not Single Forecasts

INSEAD recommends sketching at least three scenarios—best, worst, and middle cases. Assessing how each scenario affects the company and its competitors identifies vulnerabilities and areas requiring immediate action. Scenarios also provide the justification and motivation for measures communicated to the organization .

ACCA's 2026 outlook identifies three critical variables to watch: AI's productivity impact, developments in bond markets (a large rise in government yields would weigh heavily), and global trade tensions . Organizations should model how each plays out.

8. Protect Your Core Customer Relationships

During downturns, "customers will be shopping around for the best deals," according to recession marketing analysis. Early-buy allowances, extended financing, and generous return policies motivate distributors to stock product lines. Knowing the cost structure ensures cuts avoid customer-facing damage .

The most dangerous mistake is trying to be all things to all people. Companies that abandon existing customers to chase new ones often lose both. Servicing existing customers—maintaining quality, honoring commitments—builds the loyalty that carries through recovery .

9. Preserve Organizational Culture and Meaning

In crisis, top management must provide a sense of meaning. This means reminding employees of the bigger picture—what the company is trying to achieve—and demonstrating through actions that leadership cares and "we are all in this together" .

Economic downturns are critical periods to reinforce core values and behaviors. Culture is not a luxury during crisis; it is the operating system that determines whether people pull together or fragment.

History offers a counterintuitive lesson. Companies founded during the Great Depression—Disney, Revlon, Publix, Ocean Spray, Fortune Magazine—often succeeded by offering affordable comforts or essential services to cash-strapped people who still wanted to look good, feel joy, or stay informed . Meaning and purpose can be commercial advantages.

10. Think Long-Term While Acting with Urgency

The leaders who navigate downturns well balance fiscal discipline with forward-looking investment. They resist reactionary cost-cutting, prioritize strategic investments that enhance resilience, run toward disruption as a catalyst for reinvention, and double down on talent .

Harley-Davidson under Jochen Zeitz exemplifies this. Facing an aging customer base and declining sales in 2020, Zeitz restructured operations, focused on premium models, and spun off the electric division LiveWire as a standalone brand—maintaining core identity while pursuing a high-growth future .

The decisions made during downturns have lasting implications. Companies that merely survive often emerge weakened. Those that use the crisis as a launchpad position themselves to lead in the next cycle.

The Bottom Line

No one knows with certainty whether the "greatest depression" will arrive in 2026, 2027, or later—or whether it will be as severe as predicted. But the organizations that weather downturns best are those that prepare during uncertainty. They monitor warning signs, build reserves, cut strategically, invest in people, maintain customer relationships, and think beyond survival to opportunity.

The Great Depression produced companies that still dominate their industries today. The question is not whether another crisis comes, but what kind of organization you will be when it does.

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