Recessionary Reactions: You can’t cut your way to growth.

Recently I was talk­ing to the leader of a retail oper­a­tion. He was out­lin­ing the action he had taken this year to sur­vive the eco­nomic down­turn. He cut a lot of costs by trim­ming staff, lean­ing out the crit­i­cal processes and crank­ing down spend­ing. All that said, he con­fessed to me that while those things helped stop the bleed­ing it wasn’t until he made changes that impacted the top line growth did he begin to see light at the end of the tun­nel. He even stated suc­cess in terms of trans­ac­tions. No mat­ter how much cut­ting was done the tides wouldn’t turn until POSITIVE steps were taken. I don’t mean that the cut­ting is neg­a­tive in the since that you shouldn’t do it, but it won’t help you get out of a hole nearly as well as cre­at­ing growth.