Rallying in a Recession

The London Underground is one of the world’s oldest and most iconic public transportation systems. Each year, 1.35 billion passengers are funneled along a labyrinth that spans 272 stations. But in 2014, a city-wide strike caused 171 of those stations to close.

Navigating the intricate system became an even greater challenge. Commuters had to improvise new routes on the fly as their habitual routines were disrupted. Researchers seized the opportunity to study the collective data from thousands of travel cards, and a surprising finding leapt out: despite half of their usual entrance and exit stations being closed, people only spent an average of 6% more time in transit.

Stranger still, many commuters arrived at their destinations faster. Disruption forced these travelers to disrupt their own routines, exposing new and improved ways of making their daily commutes.

Last week, we reviewed the counterintuitive evidence behind the idea that innovation is the best overarching strategy for tough economic times. All innovations ultimately begin their life as a breakthrough inside of the human mind, so we discussed the conditions necessary for fostering ideas. As we saw with Ford, McDonald’s, and Figma, studying examples that are familiar yet different from your own situation can be a powerful source of clarity. 

Howard Schultz's tenure as CEO of Starbucks during the 2008 recession offers many such analogies that can inspire your own response. The initiatives that made up his transformation agenda reveal some of the more nuanced principles, supported by science and historical case studies, for influencing your approach during uncertain times.

Because as the Tube strikes demonstrated, economic disruption can open up an opportunity for us to reevaluate our habitual patterns, and replace them with healthier alternatives. When businesses seize this opportunity, they tend to not only survive a downturn, but emerge stronger than before. A select few become faster, smarter, and more efficient than ever.

All of the forthcoming details about Starbucks’s turnaround are sourced from Schultz’s book Onward: How Starbucks Fought for Its Life Without Losing Its Soul. 

The cycle in action