Sensible Effective Cost Cutting, or Corporate Bulimia?
Once upon-a-time General Motors owned half the automobile market in the United States and was the world’s biggest and most admired company. Today it has only 20% of the market and is pleading in Washington with its begging bowl.
Between its heyday and today it embarked upon at least eight vigorous cost cutting exercises – closing plants, laying off workers in their thousands, cutting R & D, new product development and marketing spend.
What was a thriving legend is now in slow death.
There is no doubt that the cutting of costs was necessary, and so many organisations all round the world are currently undergoing the same experience. What was wrong was how the cost cutting imperative was carried out..
Three basic mistakes constantly recur.
- The executives at the top who make the decision about cost cutting aren’t close enough to the knitting to understand the impact fully. Only those further down the corporate ladder, and nearer where the costs are greatest, can make these assessments and live successfully within them.
- The approach that is used is predominantly Left Brain and linear – yesterday’s solutions for today’s problems – instead of Right Brain creative thinking – tomorrow’s ideas for tomorrow’s opportunities.
- We flaunt Newton’s Third Law of Motion that says every force generates an equal and opposite force. So, those most affected by the compulsory cost cutting (corporate surgery) find extraordinarily effective ways to resist it.
There is clearly another way, with an infinitely better outcome.
High energy teams with full access to lively Right Brain thinking, and co-creating solutions in a quantum world, can accomplish far more with fewer linear resources.
That’s an exciting challenge!
It is the sort of challenge we are able to help with best.
COLIN HALL
Learning To Lead, Cape Town
Cell phone 082 568 7887
Email colinH@LTL.co.za
16 March 2009
