Upon the first indication that a recession has arrived, cutting advertising budgets is a knee-jerk reaction for many companies. However, the opposite response is probably a better strategy for most firms, according to Peter Navarro, a business professor at the University of California, Irvine.

"Increasing advertising dollars in a recession is a great way to build branded share. The two obvious reasons for this are that there is less noise in the marketplace and advertising is cheaper," says Navarro, who claims that businesses have suffered from not developing a better understanding of economic cycles.

Simply put, Navarro believes that it's high time for businesses to start honing a competitive advantage by proactively managing the business cycle and broader macroeconomic developments, or so reads his book, The Well-Timed Strategy: Managing the Business Cycle for Competitive Advantage (Wharton School Publishing, 2006).

According to Navarro, the finance departments of most large companies have reservoirs of talent well versed in macroeconomic theory. However, traditional organizational structures have created functional silos.

"Even if a company's finance department is good at managing the business cycle, this does not mean that any of that expertise is shared with the HR department or the marketing department," says Navarro, who believes that the resulting fault lines within many company organizational structures present sizable future opportunities for consultants.

"Most of what consultants do is micro strategy. And to me, macro — in a way — can now open a whole new line of work for consultants," says Navarro, who believes that consultants should be able to adapt and thrive in the macro environment, given the exposure consultants have to all aspects of business.

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