How can I convince my CEO that slashing costs will only plunge us deeper into trouble?

Dear Aunty B,

I am not sure what you can do really, but I am hoping you have some advice.

Our CEO has just announced a major restructure. The reason is that with fewer locations we can serve customers better. But the real reason is just to save costs.

But, Aunty, it won’t. By the time they pay out redundancies and then we lose clients because there is no one looking after them properly we won’t end up saving any money. We will end up losing more money.

Surely we are better off keeping all our staff and battling it out with some kind of plan.

Not giving up,

DR

 

Dear DR,

One would think so. And believe me, your CEO would love to think so too. But obviously your marketplace has changed and the strategic plan you have (I assume) hasn’t worked.

Now there is a problem. Your company has probably run out of money. Unfortunately, companies are not like governments of today who just print money when they are in trouble.

The most likely scenario when your CEO recently did the cashflow forecasts for say 6-12 months’ time based on the figures you expect to do now, the company is in negative territory with no hope of borrowing any money or raising equity. That means in six months’ time you won’t be getting your salary paid.

So here is what you must do. Accept the inevitable. Don’t spend your time and that of other staff looking back and wishing things were different. Work out how you can restructure your areas with the least damage to your clients. How can you help your company make more money down the track to stop this happening again? And work out how you can support your colleagues in difficult times.

Look forward, not backwards and take a leading role in these difficult times.

Be smart,

Your Aunty B

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