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.

It’s a good time to cut the things that are a drag on a busi­ness. Clearly, its time to be finan­cially pru­dent. Cost sav­ings that are free are some­times hard, because cut­ting waste can require a hard self exam­i­na­tion and giv­ing up com­forts or old habits. It’s just habit to get on the cor­po­rate jet when your fly­ing to your bailout hear­ing (clearly, that call wasn’t thought through).

In com­pa­nies that are lay­ing off huge num­bers of peo­ple, lots of money is being spent on out­place­ment ser­vices, under­stand­ably so, but what is being invested in suc­ceed­ing? The sur­vivors of the lay offs are reel­ing, dis­il­lu­sioned and over­whelmed. Sure, they’re happy they still have a job, but many of them can’t make heads or tails of the job they are left with.

Fear has a way of push­ing peo­ple into a reac­tionary mode. It’s as basic as our flight or fight instincts. In busi­ness, lay­ing off appears to be flight, not fight. Many are play­ing not to lose. Yes, it’s harder to win right now, but it’s the com­pa­nies that do the hard work, such as rein­vent­ing them­selves, cut­ting com­forts, apply­ing lean think­ing in new ways and even tak­ing risks, that will win. They will emerge stronger, more fit and less crowded by competitors.