Cutting Back the Wrong Things at the Wrong Time

It's very typical during economic hard times for companies to cut back on what senior management considers "fluff" or "nice-to-have's" like training or R&D efforts.  "We've got to cut down to the bone and survive," they say, "We can always do training in better times." But according to the management guru, Tom Peters, this is exactly the wrong way to go:

"Instant, mindless cutting of R&D or training or sales-force travel in the face of a downturn is often counterproductive - or, rather, downright stupid. Tough times are in fact golden opportunities to get the drop, and the long term drop at that, on those who respond to bad news by panicky across-the-board slash and burn tactics and moves that de-motivate and alienate the workforce at exactly the wrong moment."

Among all management gurus, Tom Peters is most associated with managing during bad economic times. His "In Search of Excellence" was published amid the sharp recession of 1982, and "Thriving on Chaos" debuted on Black Monday in 1987. On TomPeters.com, he recently wrote about running a business in a time of "significant and sustained economic disarray."

Peters is essentially arguing that slash-and-burn cutting is incredibly counter-productive: it demoralizes employees, devalues the work of so many important people and negatively impacts productivity.  Instead, continuing to fund training - especially training on how to manage people and processes through a tough economy - will provide employees with new insights and ideas, invigorating them and the company.

I've always said "when times are tough, people get tough on each other."  So instead of cutting back, give them the training and tools they need to cut each other some slack, work together and bring success to the company.