Cutting Back The Right Way

by John Maver

The recession is still upon us.  The economists are debating the issues and – given the political climate – the facts are being spun to make political gain.  The simple truth is that many businesses and Americans are hurting.

We see it in the 4Views community as companies are cutting back and becoming very defensive in their spending.  Cost cutting may be the right step, but it should be done with a solid plan that will protect the business for the future.  Otherwise, it’s like cutting away the parts of a tree that keep it solid and healthy.  Instead you must look for the “dry rot” that will in time cause the death and collapse of the tree.

The “rot” could be in your products where you have allowed some lines to become vulnerable to competition or even unprofitable when expenses aren’t allocated properly.  It could be with your customers, as some of them no longer justify the expense to keep them.  It could be with your processes that have become outdated and are no longer efficient.  It could be with your organization where the development, care and nurturing of your managers has not taken place and you no longer have the appropriate replacement plans or bench strength.

From the inside, it can be difficult to see the issues clearly and the possible solutions appear to be distasteful.  A rancher hires a tree surgeon to identify the rotting trees that needed removal and to thin out the trees that need thinning, even though they are healthy.  The result is a much more productive environment that will thrive in the future.

Similarly, you may need an outside expert to help ensure that when the recession ends you are leaner and healthier and not weaker from cost cutting and short term measures.  If you have a plan, please share it with the 4Views community.  If you don’t, call us and we’ll help you develop one.

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