Decreasing market. Cut the costs? Accept the loss? Transform!

Today’s scarecrow? The pressure on the profits. Boardrooms oozing with anxiety. Urgency to “do something”. To prove to the shareholders that they have a recipe.

The usual toolbox? Laying off people and cutting the costs for those more energetic. Waiting for the back-to-normal and accepting the losses for those more patient.

Both strategies are wrong.

Layoffs and blind cost cuts deteriorate company’s outlook for future growth. Now, there’s nothing wrong with eliminating an unproductive operation! But when I look at the panic on the market, it seems more like layoffs for the sake of layoffs.

Waiting for old good days to come back is passive. And they never come back. You just pile up the losses and postpone the inevitable.

Instead, take a fresh look on your business. Transform.

Want an example? When lending market decreased after 2008, banks were desperate. Fixed instalment loans’ receivables were disappearing from B/S, while new credit inflow dried out. People were reluctant to take new loans. With my team, we found a solution however: we started to treat these closed-end-loans like credit lines. We approached the existing clients and offered top-up’s. Either to the original financed amount or even beyond. While other banks struggled, we grew our assets on a declining market.

Always look for opportunities how to do things differently.