When the times, when the times they be tough… cutting spend seems obvious
But is that the right reaction? Is it possible that your entirely human knee-jerk reaction to a shock is entirely the wrong thing?
Yes. Yes it is possible.
Let’s consider the fact that when you are on your budgetary high, that place where you can spend no wrong, you waste not a moment on that thing that you believe is worth spending money on or your advisors have convinced you is worth spending money on. Those times are the times where you wave your dismissive hand and claim the cost of the thing you believe in is just a rounding error. Unless your consulting advisor is McKinsey. Then it’s a big, HUGE rounding error. I kid. I love those guys and girls. Bless their hearts. Your mileage on 7 figures and 557 slides may vary.
At any rate, believe for a moment that your thoughts on cutting are just plain wrong. What if, hear me out, what if you are cutting the things that your business is the best at in your industry? What if, you are killing in infancy your core capabilities? What if the things you are putting to the sword are the things you need to win the competitive advantage in your field?
Is it possible cutting spend during crises is the wrong thing?
I think it is. Not just from some innate sense of what people would do, as in defend the thing that they totally believe for whatever reason. But from my experience in nearly 20 years of observing and advising people. To be honest, I was often advising people that really didn’t want to be advised, but that’s not really the point.
But it is actually!
We don’t want to do the thing that we decided we didn’t want to do. It’s a real psychological thing. Once we’ve decided on something (think politics, religion, sex, music) we really, really have a tough time tolerating divergent perspectives. It’s human, it’s okay. Don’t worry.
But when it comes to destroying a business, well, that just can’t be a thing we abide.
Here’s the thing. Your initial flight or fight reaction to terrorism (2001) or economic disaster (2008) or health pandemic (2020) is just that, a human reaction to the stimuli present. It’s okay. React. But do it in your own room. Don’t react by deciding to furlough employees and arbitrarily cut programs.
Instead you need to be bold and unafraid.
Take Advantage of Crisis
A crisis isn’t the time to stick your head in the sand, to wring your hands and cut everything to the bone to save money just in case. No, a crisis is the exact time to think outside the self-built box and think of innovative ways to execute your business and serve your customers.
This could be as simple as blasting accumulated red tape out of test execution processes, massively leveraging automation and dramatically speeding time to market. It could be about streamlining overly-complicated change management and risk assessment workflows and improving efficiency. It may be about finally implementing transformations for those revenue-generating lines of business that should have been digitized long ago and for too long have languished in the land of de-prioritized work.
There are projects and programs and initiatives that often get kicked down the priority list because they seem like a luxury or perhaps are seen as too complex or maybe even seen as too small.
This is the exact time to dust those things off and get them done!
Hero, not Zero
Use the crisis as a pretext for taking bold, dramatic action to improve your business and set your capabilities on new, improved footing. Emerge from the crisis stronger than you were when it began.
This will set your company apart from competitors who are all in the midst of full-blown panic. It will also set you apart from your peers in the company who are counseling conservation, caution, retrenchment.
