Be Suspicious of Across the Board Cuts

Yes, I said that. Be suspicious of across the board cuts.

If your company declares, “We are cutting all salespeople’s travel by 25 percent,” or “Every department will cut staff by ten percent,” lift your eyebrows superciliously, and say, “That’s pretty stupid.”

Making across the board cuts is like going to the bank and asking for five inches of money. A ten dollar bill and a one dollar bill take up the same amount of space, but their value is not equal. Your company does many things, and making across the board cuts ignores that each of these things has its own value.

Maybe some salespeople in your company should double their travel because they are great in person with customers, while others should stay in the office and talk to customers by phone. Maybe certain departments should cut 50 percent of their staff and others should add people.

Now is the time to think! Avoid the temptation to “be bold” and use the budget bulldozer to plow through tough times. Discernment will result in profitable action. Slash and burn will feel good for a few minutes, but in the end, it will cost you.

Don’t confuse movement with progress! Do things, and do them quickly, but do the right things. Otherwise, you’re really not doing anything.

Steve Yastrow posted this on January 22, 2009, in Strategies.
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