Companies are constantly looking for ways to cut costs to stay profitable. It’s a buzz topic in boardrooms and a concern that generates endless questions from businesses struggling to navigate market shifts, new technologies, and changing consumer behaviors. However, cost-cutting alone can’t be your only strategy for survival, let alone growth.Â
In stressful times, it’s natural to seek immediate relief. For many businesses, this often means making cuts—reducing staff, trimming marketing budgets, or postponing innovation projects. The problem arises when cost-cutting evolves from being a survival strategy to being the only strategy. Adopting a short-term view to solve an immediate financial crisis can jeopardize your long-term growth and stability.
One aspect often overlooked during the cutting phase is the human element. Your employees are not just numbers on a spreadsheet; they are the backbone of your organization. Cut too deep, and you risk losing talent, diminishing your corporate culture, and tarnishing your employment brand. In the long run, rebuilding a culture is much more challenging and time-consuming than recuperating sales.Â
Waiting for a downturn to reconsider your business strategy is a reactive move. Instead, businesses should adopt a proactive approach, constantly evaluating and adjusting their strategies. Can you move to the cloud to save on operational costs? Is it time to renegotiate contracts with vendors for better terms? Finding healthier avenues for generating profits enables businesses to avoid disruptive cuts that negatively impact employees and long-term projects.
Tough decisions may be unavoidable, but they must be made judiciously, and their effects must be understood in the context of the company’s broader objectives. This is a crucial moment to exercise transparency and build trust with your team. When employees understand how tough decisions fit into the larger strategic framework, their trust in leadership grows, as does their engagement and productivity.
No one says that making hard choices is easy, but being human-centric in your approach can go a long way.Â
People support what they help to build.
If your team understands the ‘why’ behind the decisions, they’re more likely to stand by them—even if it means temporary discomfort. A company’s greatest asset isn’t its product or services, but the people who work there. When employees feel valued and included, they become your greatest brand ambassadors, infusing energy and innovation into the company’s culture.
In my years of consulting with companies, the most successful are those that consider the holistic health of their business, embracing a human-centric approach even when the decisions are difficult. Make the hard choices, but make them wisely, considering the multi-faceted impacts they will have on your business today, and your legacy tomorrow.
For information on what it takes to become a conscious leader in any market, check out our Conscious Leader Academy. This series includes interactive sessions based on Keystone’s Impact Model, featuring pre-work, sessions, homework, coaching and peer accountability (through the peer learning cohorts). A standout feature is the built-in accountability system to enhance overall leadership growth and performance.
