Lara Morgan, the highly successful entrepreneur, said something smart to me the other day. If cuts are necessary, and you care about your business and your people, cut once and cut deep. (You can see her talking about it here on the BBC’s website.)
One’s immediate reaction may well be something like “harsh,” “ruthless,” even “uncaring.” Yet, this is really the way to go. Why? Because the alternatives are more painful. For everyone.
Making cuts is a truly painful thing to do, especially if you have to lay people off. So there’s a big pitfall: the death of a thousand cuts. There’s a temptation to cut a little at a time and hope it’ll be enough. It appears to minimise the pain. And after all, you can always do a bit more if you have to, right? The trouble is, this amounts to an ongoing agenda of firefighting. In the long run it causes a much greater amount of pain, for you and for your staff.
So I was curious about what underpins each approach. Even if you know once and deep is best, it can be very hard to grasp the nettle. What could make the difference?
Something that can empower a business leader to make this sort of tough decision is having a clear, compelling future. You can’t realign and resize your workforce decisively if you aren’t clear about and committed to where you’re going. Instead, you’re in a place of confusion and reaction, ruled by external events. (AKA firefighting.)
Let’s put it another way.
If you cut once, deep, you’re thinking of the future you’re working towards. Your actions are concerned with fulfilling that future. The cut’s purpose is to reconfigure things in alignment with it.
If you go for many small, ad hoc cuts, you’re looking backwards. You’re trying to fix something that was designed to fulfill a future you’re no longer heading towards.
So the key to creating a clean realignment in one go, including the appropriate cuts, is being clear about where you’re committed to going. If things change significantly, your first priority has to be to reinvent your future. Transformation, not tweaking. Then, you can make a clean, decisive move to a new situation, rather than firefighting.
