MIT Sloan Management Review LogoIn December 2007, Shantanu Narayen took over as the CEO of Adobe. The timing seemingly could not have been worse: Not only did Narayen and his team have to confront disruptive developments such as the rise of new platforms like the iPhone and the emergence of nimble software-as-a-service (SaaS) competitors, they had to do so in the midst of a financial crisis that upended markets around the globe.

But in the face of upheaval, Adobe launched a comprehensive transformation strategy. In 2008, Adobe tested a software-delivered model of Photoshop. A few years later, the company stopped producing packaged software and moved to a completely SaaS model, charging a monthly subscription fee to access its products online. In 2009, Adobe made the bold decision to purchase the web analytics and marketing company Omniture for approximately $1.8 billion, a price 40% lower than Omniture’s pre-crisis peak, but 2.5 times above its mid-crisis trough. That acquisition would serve as the cornerstone of Adobe’s efforts to build a new growth business related to advertising services and analytics. From 2009 to 2019, Adobe’s revenues tripled, and its stock price went up by 29% a year.

The story of a company acting boldly in the face of tough times is not unique. Innosight research shows that financial downturns can be a great moment for “on-the-brink” disrupters that have laid a solid foundation but have not yet crossed $1 billion in revenue. Facebook, Alibaba, and LinkedIn, for example, all thrived during the Great Recession (Facebook crossed the $1 billion revenue line in 2010). New companies can start in downturns as well. Indeed, close to 100 unicorns were created between 2007 and 2009, including notable new businesses that responded to challenges surfaced by that period, including asset-sharing platforms Airbnb and Uber and financial services platforms Stripe and Square.

There will be ample opportunity for existing companies and aspiring entrepreneurs to create similar success stories in the months and years ahead. The turmoil of COVID-19 has catalyzed preexisting trends around the adoption of digital platforms and services as well as moves to decentralize health care via telemedicine and preventive solutions. Innovators can ride those trends to create growth, but doing so requires that leaders show the courage to consciously choose their futures.

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