How tech companies can best position themselves for top quartile performance

Data-driven insights from the 2008 Great Recession can reveal a path forward for companies navigating the COVID-19 pandemic.

A deep dive into data from the 2008 Great Recession shows that certain strategic decisions taken by executives during the Great Recession strongly correlated with top quartile performance.

With the initial shock of social-distancing and “shelter-in-place” orders in the rear-view mirror and consensus forming around a long and challenging economic recovery, data-driven insights provide a potentially valuable playbook for technology executives navigating the current crisis. While there are many differences between the COVID-19 crisis and the Great Recession, actions taken by companies during the previous crisis illustrate the rich rewards of making the right decisions and the consequences of getting it wrong.

As a follow-up to our recently published thought piece on lessons learned from the Great Recession, we analyzed the decisions taken by nearly 300 publicly listed technology companies with a market cap in excess of $100 million. We assessed the differences in the strategies deployed by the companies that generated the highest total shareholder returns (TSR) versus the remainder. We categorized these as top quartile performers. Interestingly, successful strategic decisions were rewarded largely irrespective of the strength of a company’s balance sheet heading into the Great Recession, its specific sub-sector or whether it had previously been a top quartile performer.