Economics/Class Relations

How to prepare for a downturn

By Alyson Shontell, Fortune

This has been a dizzying year for businesses, and the fourth quarter has only been an even wilder ride. In November, we watched Elon Musk take over Twitter. A $32 billion crypto exchange, FTX, crumbled in 48 hours after being exposed as a de facto Ponzi scheme. And tech companies have laid off tens of thousands of employees in the hopes to trim fat and ride out an economic downturn.

With all this chaos swirling, perhaps the only certain thing is that 2023 will be even more uncertain. With inflation still punishingly strong, and a U.S. recession looking increasingly likely, the biggest challenge business leaders face is how to steer a course between those two dangerous rocks—and come out stronger on the other side.

 

CEOs can’t fight rising prices without help from policymakers. Our top story this week explores how U.S. Federal Reserve Chairman Jerome Powell is struggling to rein in the highest inflation seen since the 1980s. As author Christopher Leonard notes, Powell has two choices: “He can tolerate high inflation, and risk that it gathers strength and begins to rage out of control. Or he can tighten the money supply, and risk recession and possibly a financial crisis.”

 

Both those options are ugly, which is why smart CEOs are focusing on how to protect their companies. Fortunately, seasoned leaders have coped with recessions and inflation before—not to mention the unprecedented dilemmas that came with COVID. Shawn Tully spoke with and studied the work of five battle-tested Fortune 500 CEOs, compiling their top five strategies for steering their businesses in volatile times, including raising prices, taking care of your best people, and seizing opportunities that arise when your competitors stumble.

The takeaway: Leaders who act decisively in stormy times can reap big rewards when the waters finally get calmer.

You can read these stories and more below.

 
Fed Chair Jerome Powell is on a high-stakes mission to tame inflation. Some insiders fear he’ll go too far. Others fear he won’t go far enough

 

The Federal Reserve chairman has sworn to fight runaway price increases, but Powell’s critics fear he’ll cave in to political pressure before he wins the battle.

BY CHRISTOPHER LEONARD

NOVEMBER 29, 2022

 
Fortune’s top trending stories:

FEATURES

How CEOs can lead in a recession and come out stronger: 5 powerful strategies from corner-office veterans

Battle-tested business leaders from CVS, Southwest Airlines, Honeywell and other Fortune 500 companies share their best ideas for navigating a downturn.

The best financial strategies for surviving a recession in 2023 from 3 top advisers

Acclaimed investing pros share their advice for navigating a recession: stay calm, stay invested, and invest locally.

Alex Cooper battled Barstool Sports for the rights to her raunchy ‘Call Her Daddy’ podcast and won. The victory led to a $60 million Spotify deal and puts her in control of the hit show’s future

Cooper has toned down her content since the early days of the sex and relationship show, but it keeps climbing the charts, becoming Spotify’s No. 2 podcast and a huge draw for advertisers.

FINANCE

A VC who’s been panning crypto since 2017 discusses where he’s investing now

1984 Ventures tries to avoid the flavor of the day, whether it’s Google Glass, 3D printing, virtual reality, autonomous driving, crypto, or the current obsession with generative A.I.

In 2020 Sam Bankman-Fried tweeted about a VC ‘horror story.’ Now that investor reveals what he saw at Alameda Research—and why he walked

This VC was ready to invest in Alameda Research, sister company of the now infamous FTX. That’s until the red flags started to add up.

LEADERSHIP

Find me on LinkedIn: How Twitter’s upheaval and a looming recession could prove fruitful for the professional network

LinkedIn is still a platform for job seekers and career networking, but it has a shot at becoming a digital town square.

TECH

Salesforce insiders ‘shocked’ as co-CEO Bret Taylor abruptly resigns

Salesforce co-CEO Bret Taylor has stepped down “to return to his entrepreneurial roots” in a surprise move that leaves founder Marc Benioff as the sole leader of the $160 billion company.
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