Times of crisis are great opportunities to reflect on what we do and how we do it. During good times, everyone is busy keeping up with demand to spend time rethinking the organization.
Now is the time for the chief operating officer to carefully review everyone’s responsibility with the idea of reorganizing functions to save money. The excess organizational structure that has grown up during the good times will become obvious. The candidates for permanent layoffs will emerge from this study.
Form a small group of key managers and line workers to come up with cost-saving ideas. Give them a target and watch them exceed those cost-cutting objectives. The workers know where the waste is located. Trust them. Your trust will be rewarded now and over the longer term. Be sure to take action on many of their recommendations lest they think their efforts were not taken seriously.
Don’t forget to hit suppliers for deeper discounts. Everyone needs to keep their order books as full as possible.
Now is also a great time to relook at the product line. There are undoubtedly older products with poor margins and declining sales. Get rid of them from the catalog, and fire sale the leftover inventory.
Look carefully at those weak sales offices. Marginal sales personnel need to be looked at carefully. Are they ever going to make the grade? Now is the time to make the hard decisions and cuts. Also, put strict limits on sales expenses for entertaining, shows and excess travel.
Other Useful Cost-Cutting Ideas
By Jack Marino
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