CEO guide to thriving in uncertainty

For many C-suite executives, cost control and margin maintenance are the first orders of business. Though prudent, those shouldn’t be the only priorities.

High inflation rates, supply chain disruptions, and geopolitical uncertainty—among other challenging market conditions—are prompting C-suite leaders to take a hard look at cost takeout and margin preservation. Some executives are now facing make-or-break decisions about the future of their business.

Reducing costs is key. But cuts need to be smart and strategic—and reinvested into the business so it can emerge stronger and more competitive when economic winds shift again. 

Who found upside in the last downturn?

KPMG looked back at the “Great Recession” of 2008-09 to see which companies emerged in a better position—and why.

We learned that the best performing companies in terms of improving revenue and EBITDA margin reaped rewards. Companies in the lowest quartile posted 8.7 percent declines in revenue versus 36.5 percent growth for the top quartile.

For the poorest performers, this led to a 5 percentage-point decline in gross profit margin, and EBIT margin declines of 3.8 percentage points. By contrast, the top quartile delivered 1.1 percentage points growth in gross profits, and 0.9 percentage points growth in EBIT margin, on average.

How did the winners win?

These companies took cost actions to preserve margins when sales slowed. But they also used the downturn to plot future growth strategies. They invested in technology. They snapped up new assets. And they shed businesses that no longer had sufficient differentiation, growth potential, or alignment with their core strategy.

In this report, we share specific examples of high-performing companies from the last recession. We also offer eight ways for any company to prepare this time—based on the patterns of previous downturns, the insights of KPMG economists, and our survey of more than 400 top business leaders.