If you entered the workforce within the last decade or so you have not experienced a recession while there. Defined as two or more consecutive quarters of negative growth in the GDP, the last official recession happened in the fourth quarter of 1990 and the first quarter of 1991. There have been other bumpy economic times that skirted close to this strict definition of recession since then, but in general, if you’re a Gen Y, your entire life thus far has been lived under pretty rosy economic conditions.

I hope that continues to be true. But depending on which economist you read, it might or might not be. There may be some pretty rocky times ahead.

Managing successfully through a recession is sometimes viewed almost as an art form. One of the criteria senior leaders like to use in selecting line managers for these times is whether they’ve weathered tough economic times in the past.

Why? I suspect because there’s an element of feel, of judgment, involved -- discerning what’s the trend and what’s only a temporary blip, knowing when to take action and when to sit tight.

This discussion forum is an invitation to all the battle scared veterans of past recessions to share your wisdom on the best ways to prepare for and manage through a downturn with those among us who never have.

To kick the discussion off, I’ll offer my thoughts. But first, a quick analogy.

Home for me is on a farm with animals, including about a dozen horses. Living closely with horses is never dull -- they are fast and powerful and they can switch from calm and gentle to terrified and down-right dangerous at the drop of a hat. The key to safety, both theirs and yours, is understanding their “normal” rhythms well enough, anticipating problems before they occur -- spooky things, strange things -- and heading them off. When we first moved to the farm, a more experienced person advised us that it would take three years to become comfortable living with horses, to know them well enough that conscious thoughts about each possible danger become instinct. That turned out to be about right.

Weathering a recession successfully is a lot like living with horses. Things can go bad quickly. The trick is reading the signs well. That anticipation gets a lot easier when you’ve been through it. You know what to look for, you smell trouble before it gets out of hand.

For your first time through, here’s my advice.

Question everything, deny nothing. Pay attention to the first negative result or indicator. Don’t assume it was the aberration and everything will bounce back next month. Maybe it won’t. Especially since your experience will tell you that sales will go up, flip the manual override switch and reconsider. Probably the biggest mistake is waiting too long to take action because you assumed things would turn positive again.

Favor greater agility over lowest cost. Make decisions that favor flexibility, even over cost. Even if it would be less expensive to buy -- assuming demand were steady -- rent instead. Take advantage of SaaS capabilites for IT, rather than investing in a big in-house effort. Use contract labor. Give yourself as much flexibility as possible in case demand drops.

Watch your cash. Cash is a better gauge in a recession than profits. Are your customers slowing down their payment cycle? And put your managerial emphasis on managing your cash well.

Develop an alternative plan(s). Answer this question today: What would I do if sales dropped 10% or more? Don’t just worry about it -- develop a detailed plan. During one of my darkest years (after the dot.com bust, since I was working in a small start-up), our CFO and I had an alternative plan in hand that we reviewed each week, identifying what specific action we would take, if performance dropped to various pre-specified levels. (I’m proud to say we were one of the few firms in our space to weather the storm.)

And, spend some time thinking about what you’ll do when the economy picks up again, because it certainly will. Have your growth plans ready, too.

Other readers, what advice would you offer to those who may be heading into their first recession?

Read all of Tammy Erickson's Across the Ages posts

MORE ON MANAGING DURING UNCERTAINTY:
HarvardBusiness.org's Downturn Survival Guide
And If the Good Times Stop Rolling? Dealing with a Downturn (HMU Article)
Don't Let Your Brand Falter During a Downturn (HMU Article)
Moving Upward in a Downturn (HBR Article)
Five Missteps to Avoid in Volatile Times (HMU Article)