BCG Henderson Institute

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The idea of “crisis management” requires no explanation right now. Something unexpected and significant happens, and our first instincts are to defend against — and later to understand and manage — the disturbance to the status quo. The crisis is an unpredictable enemy to be tamed for the purpose of restoring normality.

But we may not be able to return to our familiar pre-crisis reality. Pandemics, wars, and other social crises often create new attitudes, needs, and behaviors, which need to be managed. We believe imagination — the capacity to create, evolve, and exploit mental models of things or situations that don’t yet exist — is the crucial factor in seizing and creating new opportunities, and finding new paths to growth.

Imagination is also one of the hardest things to keep alive under pressure. Companies that are able to do so can reap significant value. In recessions and downturns, 14% of companies outperform both historically and competitively, because they invest in new growth areas. For example, Apple released its first iPod in 2001 — the same year the U.S. economy experienced a recession that contributed to a 33% drop in the company’s total revenue. Still, Apple saw the iPod’s ability to transform its product portfolio: It increased R&D spending by double digits. The launch of the iTunes Store (2003) and new iPod models (2004) sparked an era of high growth.


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