What “Recession Ready” Means Now

In 2019, fears of a recession were swelling. The fears are back again, but lessons learned from the pandemic can help associations address them.

It feels like a generation ago, but in late 2019 the emerging COVID-19 virus was hardly a blip on Americans’ radar. A much bigger concern was that a recession was looming. A decade-long bull market couldn’t be sustainable, right?

We never got to find out whether that was true in a “normal” environment—the economic challenges that arrived were largely unique to the virus. But while we’re exactly not back to normal three years later, in many ways we’re back where we started, keeping an eye on a potential looming recession and thinking about how to address it.  

A board built for efficiency and with a bias toward innovation will be key for associations in a recession.

For associations that have had to dip into reserves, lost members, and sacrificed meeting revenue in the past three years, the prospect of a recession at this moment is especially unwelcome news. But the strategies that associations can use to address them largely haven’t changed. Indeed, I had the good (or bad, depending) timing of writing about recession preparations back in late 2019, and much of the advice association leaders provided back then still applies: build up reserves, develop nondues revenue streams, look at your dues structure, and redouble your engagement with members so they understand the value they get from your association.

Another key tactic is board engagement, and that’s an area where there’s a difference between late 2019 and today. The September 2019 Association Economic Outlook Report by Marketing General Incorporated, released as recession fears were growing, found a substantial amount of skittishness on boards: 30 percent of respondents then said the slow pace of decision-making within boards and senior executive teams were the biggest obstacle to recession readiness. In 2021, that concern spiked: 56 percent of respondents to MGI’s survey found that the “slow pace of board decision-making” hampered their COVID-era response. 

Moreover, 31 percent of respondents cited an institutional aversion to risk as one complicating factor. By 2021, 41 percent of respondents saw that as a roadblock.

There are a couple of ways to read this data. It may be that boards now are more snakebit. It may be that in 2019 people underestimated just how slow and risk-averse boards can be in a real-life crises. Regardless, one takeaway from the surveys is that speed has been a virtue: In 2021, 81 percent of respondents credited the “quick pace of senior executive decision-making” as a key factor in associations responding to the COVID economic crisis.

That’s not to say that boards failed during the pandemic. By design, they’re deliberative bodies, and I’ve heard about plenty that stepped up and became more efficient. Nor do I mean to suggest that speed is everything—rash decisions generally go poorly. But having a board that’s built for efficiency, and with a bias toward innovation, was central to associations pulling through during the pandemic; if a recession is indeed in the offing, such a board will be meaningful then as well. 

And there’s some pre-pandemic guidance around that as well. In my 2019 story, I received two pieces of advice about getting boards recession-ready. First, make sure your board has a clear direction about its mission and priorities going in, so essentials don’t get cut in a crisis. Second, make sure your board-selection processes are free of favoritism and it’s-my-turn-ism that challenges a board’s ability to be strategic. “The difficulty we find is with those organizations where there is very little control over who ends up on the board,” Tecker International’s Glenn Tecker told me at the time. “In which case it’s very difficult to compose a board with individuals who have mindsets, competencies, and experience that can enable the organization to effectively navigate through a downturn if it occurs.”

Good advice, recession or no.

What has your organization’s preparation for a recession looked like? Share your experiences in the comments.

(MicroStockHub/iStock/Getty Images)

Mark Athitakis

By Mark Athitakis

Mark Athitakis, a contributing editor for Associations Now, has written on nonprofits, the arts, and leadership for a variety of publications. He is a coauthor of The Dumbest Moments in Business History and hopes you never qualify for the sequel. MORE

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