Veteran business leaders are no stranger to recessions. Having led companies through the dot-com bust of the early aughts, the Great Recession, and the many challenges of the pandemic, I know there's a lot to be concerned with right now whether you're a startup founder or a Fortune 500 CEO.

Inflation, interest rates, and share values are all signaling it's time to batten down the hatches. Major enterprises like Microsoft, Twitter, Amazon, and Meta have already started using the traditional decision-making playbook – raise prices, cut margins, and lay off staff – to try to weather the storm. But these can only get you so far in this environment. While these tactics all remain on the table, today's leaders have a new chapter in the playbook that can help shield them from the worst of the recession ahead: the data chapter.

Business' relationship to data has changed dramatically over the last decade. Companies are generating higher volumes of data from their standard business processes, data literacy has improved our ability to transform data into insights, and agile governance – the process of managing and improving data for accurate insights – has evolved.

Today's executives have the potential to make tough decisions with the benefit of insights a hundred times more detailed and a thousand times faster than during the Great Recession. Data can also help business leaders avoid the wrong decisions – like laying off thousands of staff without understanding the institutional knowledge loss or potential impact on consumer experience.

At Coremetrics, one of the first businesses I founded and led, I saw firsthand how better data could have helped companies weather a recession. Coremetrics provided advanced metrics to dot-com retailers, moving past simple points of data like page views to more effective measures of success like browser-to-buyer conversion ratios and advertising-clickthrough-to-sales ratios.

But by the time we were fully rolling out our product, the dot-com bubble had burst. With more advanced metrics and analytics, more dot-com companies could have withstood the economic turbulence and been prepared to succeed as the economy recovered.

When it comes to the pandemic, no better example exists of data as the ultimate tool than Airbnb's remarkable turnaround in 2020. Airbnb's value was devastated by the pandemic and revenue fell by 80% in the first eight weeks of it. However, Airbnb has always been a data-driven company - its fifth employee was a data scientist. The company regularly takes steps to ensure that data can be accessed, discovered, and leveraged effectively.

Founder and CEO Brian Chesky and his team had also invested in building their own data catalog – a searchable inventory of data assets – which gave them the tools necessary to act quickly and decisively to withstand the worst effects of the pandemic. In particular, Airbnb used its data savvy to map all reductions in force and activity to the capabilities needed in the new environment.

That "smart" cost-cutting and data-driven reinvention of the business toward core activities, such as local stays, enabled the company to actually move from a situation of more cancellations than bookings in March and April to a modest but critical 1% growth in gross bookings in June. As a result, Chesky was able to lead Airbnb to a more than $100 billion initial public offering by the end of the year, the biggest IPO of 2020. And Airbnb just reported its best quarter yet, with Chesky citing a history of records.

Another case study from the pandemic came from one of our customers at data.world, one of the world's largest consultancies. As their Fortune 500 customers faced the biggest disruption in their businesses since the Great Recession, they turned to many external data sources to help them navigate it.

For example, their customers needed to forecast out demand in a rapidly shifting environment and find fast-moving data like credit card transactions and foot traffic data.

A data team curated several public external datasets, making them available via their data catalog, which accelerated multiple client-serving teams in COVID response and resilience engagements. This paid dividends in customer relationships in the short-term but also helped set the stage for long-term, firm-wide digital acceleration.

While a recession will present obvious challenges and hardships for companies and individuals in enterprises and beyond, there is a chance for it to be a powerful engine for long-term, overdue change in business.

Businesses that successfully weather a recession with a mix of traditional cost-cutting measures and forward-thinking investments, like in data, have historically proven to be stronger and better on the other side compared to their competitors.

This time around, with the right mindset and right investments, businesses can emerge more efficient, resilient, and poised to capture the pent-up potential of a rebounding economy.

If there's one thing we've learned from past recessions, it's that waiting around to prepare and protect your business can be the kiss of death. If you haven't invested in figuring out your data issues by now, there's a very narrow window within which to act before it will be too late to fully leverage the ability of data to defend your enterprise from the worst of the recession.

Taking concrete steps to invest in the right tools and shape an organizational mindset around data will pay dividends, literally and figuratively.

Brett A. Hurt is the co-founder and CEO of data.world and the author of The Entrepreneur's Essentials.