Until the 1980s, many economists, finance professionals and strategists believed the business cycle, like the stock market, was a “random walk” that couldn’t be predicted—and couldn’t be managed. In recent years, however, numerous studies have demonstrated the power of such forecasting variables as the Economic Cycle Research Institute’s Weekly Leading Index, stock prices and the bond market’s “yield curve.”1 If the business cycle can indeed be forecast in an accurate and timely enough manner, then shouldn’t managers who cultivate economic and financial market literacy and learn how to apply forecasting models manage the business cycle better than their competitors?

My 2004 article “Principles of the Master Cyclist”2 made the case for why companies need to learn how to integrate strategic business-cycle management into their tool kits. It presented a set of principles that savvy managers can use in making tactical decisions (involving, say, inventory management, marketing and pricing) and strategic decisions (involving such things as capital expansion and mergers and acquisitions), and it offered case studies supporting the argument.

2004 was not a particularly good time to be promoting business-cycle awareness... To read the complete article, login or sign-up using the form below.