How to cut when times are hard

I remember the day when I was asked to cut $6M from my advertising budget. It was a month after my mother had died, and a week after a key employee on my team had left unexpectedly. (In fairness, the budget cut was 15% of my overall budget but it cut deep into many key programs and caused a lot of heartache.) My mom's recent death gave me an emotional shield that made me more effective than ever before or maybe ever since when getting bad news at work -- "well, it sucks, but we're not dead!"

Cutting budgets and plans is hard, but working for a business that's fiscally responsible and can keep paying employees month after month is worth the pain of change. Here's how I've weathered several storms:?

#1 Process your emotions so you can live in the current reality - When hard times come and you have to make big cuts, the first and most important thing is to allow your emotions to flow through so you can move past them. If you skip this step, they will still be there seething, causing stress and anxiety, waiting to be triggered and creating illusions of your reality. You may have grief about losing a future you had already envisioned with a big team, or loosing a sexy campaign you thought might rocket your brand. You may have grief that your stock options are low and you've been sacrificing for much less financial reward than you thought. Feel your pain, let it flow for a bit. Maybe journal, go on long walks outdoors, but let it surface, watch it and name it so it can pass. Only then can you settle into what's reality now. What's the best you can do with the current situation? How do you make this cutting the most positive process possible for your team and peers? It's hard for all of you. How can you make it better, not worse??

#2 Ask for the total amounts - Sometimes when cuts are handed down, they can be very specific about a number of people, or a specific project budget that should be cut. Try to get in on the strategy conversations early -- understanding how MUCH needs to be cut in total - so you can help shape WHAT should be cut. As a leader, you know your part of the business best. Where can you cut with the least impact on results? Try to get out of someone else micromanaging what you should cut.?

#3 Get your budget, billing and tracking in order to understand what you really have - This may be pedantic, but in good times, sometimes budget tracking gets.... sloppy... ASAP get everyone to put their planned budgets and actuals in a really organized spreadsheet or system. You might find that people on your team are holding money for an idea that's not coming to fruition, or have underspent in an area, or have buffered so much that you can steal from these 'hope' spend budgets instead of cutting real things first. In marketing, continue building your ROI tracking to see and prove where spends are making a difference. Tough times make us stronger and make us better at tracking details.?

#4 Be honest with yourself - Even if you've been effective at moving past your intense emotions, your delusional self is going to keep butting in. But how will I accomplish everything I've promised without these resources I counted on? You might not be able to. Accept it. What CAN you do? How can you get creative to do things in new ways? How can you cut some corners? How can you become more efficient? It's hard. It's frustrating you have to. You might not be successful. But accept where you and the company are right now and plan your maximum impact with what you have, not what you used to have or wish you had.?

#5 Prepare the team - As a leader, the most important thing in a cutback situation is to keep the team engaged, feeling safe and hopeful. You want to show them your resolve that you will get through this, and you will get through it together. You may even come out on the other side with an advantage over competitors, with smarter ways of working, with new ideas. You want to paint a picture of a future that is brighter because of the smart financial decisions you are making now. You want to share the history of companies innovating in downturns and coming out even stronger. You want to share your own affection for the team, the product, the market you're in. You want to identify your top achievers and continue to find ways to challenge them even as they may have less headcount or budget. Retaining top employees is among the hardest parts of cutbacks, but one of the most critical to long-term success.?

#6 Rip the bandaid - Cuts are going to be hard. They suck. But ripping off the bandaid instead of dragging it out is critical. To move past the pain, you have to move towards it, through it and out the other side. Sometimes it makes sense to make a big cut in one area to preserve the others. Often it's better not to spread resources too thin and cause atrophy across the team. But maybe your cuts aren't so big - maybe you can just cut back a little across the board. Be strategic and thoughtful. These are the moments that make a leader a leader.?

#7 Keep a strong plan for "Grab Bag" spends in case money comes back unexpectedly. Even though it may feel like the sky is falling, it's really just a moment in time. Times will continue to change. You may be asked to make some new big bets to help give the company momentum. If you're at a public company, you may get money at the end of the fiscal year that was held back for safety - but now must be spent to keep financials as forecasted. You can't just look down at the road, you have to keep your head up looking ahead as well. That year I cut $6M... I got back $5 at the end of the fiscal year and got to invest in some cool (but quickly executed) programs.?

Bad times come, bad times go. What's most important is weathering the storm as a leader that calms others, creates a solid plan, accepts trade-offs and keeps moving forward.?

You can do this. You've got to do this.