When you get too heavy, you go on a diet. The same goes for businesses. When profitability sinks, companies begin to cut.
Over the past 2 years we have seen companies go through excessive amounts of cutting. You can see it in the employment numbers. Between October 2008 to July 2009 Canadian employers cut 417,000 jobs. The story was even bleaker in the US with the loss of 2.6 million jobs in 2009. Companies cut the fat.
The problem with dieting is you can’t grow. You can either be shrinking or growing – you can’t do both. For example, athletes who want to increase their size and add muscle eat a lot more food. Their body needs more calories to grow. Eating more doesn’t mean putting on fat. Athletes have strict diets and advanced exercise regimes to convert all those extra calories into lean muscle.
Diet too much, and you become anorexic
Through the recession many organizations became artful in managing the bottom line. One of my clients recently remarked, “We can squeeze a nickel ‘till the beaver farts.” (We Canadians have beavers on our nickels.) I must admit, I laughed pretty hard when he said it.
Cutting only goes so far. Once all the fat is gone you start cutting into muscle and bone. Those cuts can be crippling. Also, they’re counter productive. Deep cuts are often in response to a symptom: not enough cash. The real problem is not enough sales.
Nothing relieves pressure like sales
“Nothing relieves pressure like sales” is a beacon statement in our firm. Whenever morale is down or we’re wrestling with a business problem someone will say it. The phrase is great, because it changes our perspective. Rather than wallowing on the bottom line we look to the top line for solutions.
Money solves most problems. It gives you freedom. With money you can make decisions, invest and innovate. So go get the money.
Sales starts with brand
The top line is naturally connected to your brand. It leads to strategic questions like,
- What business are you in?
- What value do you bring to your customers?
- How do you increase market share and serve more customers?
These top line questions are very useful, because they get you to figure out how to grow and how to innovate. These are also far more motivating and inspiring questions to ask rather than considering what programs to cancel or positions to eliminate. Look for options to develop your brand, increase market share and drive sales.
The next time you wrestle with the bottom line just remind yourself, nothing relieves pressure like sales.