The Axe Is Not Your Friend
Mark Bilton
Independent Chair | Strategist | Leaders' Advocate | Advisory Board Creator | International YPO Facilitator | YPO Emeritus Ambassador.
Cutting costs is a simple way to improve profitability, in theory at least. However in the real world of a dynamic marketplace, imperfect people, unforeseen circumstances, collateral damage and unintended consequences, the spreadsheet seems to lie.
No one has ever cut their way to sustainable profitability. Then when the result isn’t met, a new round of cost cutting and the inevitable and perennial restructuring continues. The axe is not your friend.
How do we overcome this somewhat inevitable cycle?
Get more than the accountants on the job. The pure financial perspective is still only one view, albeit important. Whilst keeping costs flexible and under control is an important factor; investing in people, future capabilities, and bolstering your value proposition through innovation and service, are what will ultimately grow your business.
So it’s not “either or” it’s “both and”; now and the future, costs and investments, people and profit. A broad stakeholder perspective creates a more balanced and sustainable organisation.