Stock prices soared as he slashed jobs and shuttered whole operations. It was during one of those earlier recessions that the colorfully nicknamed Chainsaw Al Dunlap first gained notoriety as a uniquely enthusiastic and ruthless job cutter. In each of those downturns, the money people took over and started cutting-payroll, benefits, capital projects, energy consumption, raw materials, anything and everything that might show up on the balance sheet as a cost of doing business. What to do, what to do? Should we focus on cutting costs as much as possible, driving every shred of waste out of the operation? Or should we focus on winning as many new deals as possible, throwing ourselves into business development with all the energy we can muster?Īs you can probably tell from my picture, I’m old enough to have lived through a couple of recessions in the past. It’s enough to make you want to collect firewood and hunker down behind the desk in your cozy corner office for a long, cold winter. It's difficult to find credit, venture capital is scarce, and many businesses-perhaps your customers’ businesses-are about to start cutting back on discretionary spending. Even if you’ve done nothing but glance at the quarterly statement on your retirement accounts, you’ve shared in the experience. The bankruptcy of Lehman Brothers, the collapse of Bear Stearns, the near collapse of AIG, the failure of Washington Mutual, the $700 billion bailout package, the automakers' bailout: well, you’ve been reading the headlines. A tracking graph of the recent performance of the world’s stock markets looks like a real-time image of your kid playing with a yo-yo. The predictions are frightening, the reality is sickening. What I’m getting at is whether it’s better to focus your efforts on cutting expenses or on running after every bit of new business that’s out there. It has to do with managing your business, particularly in tough economic times.
But this has nothing to do with “staying the course” or “raising the white flag of surrender.” Cut or run? That sounds like the kind of question you might hear during a Presidential debate.
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