A recent opinion column by Bob Davis in Washington Technology “Cutting Layers of Management Exposes Strategic Risks” discusses the difficult balance companies must maintain to grow while simultaneously cutting costs. The column points out that “Cost cutting tactics by management fall into the realm of what is known as financial reductionism. Financial reductionism is a relentless process by which management decisions are always viewed through a financial lens, i.e. the bottom line.” The column links the resulting effect of cost cutting (fewer managers on staff, fewer benefits and training for employees, less money for bonuses and raises, etc.) as a direct conflict to the requirements for generating growth. The column concludes by questioning whether managers who lack time to engage in strategic thinking can really contribute to the growth strategy for their company. Bob Davis asks three key questions every company should consider. “How will growth contribute to the embodiment of management’s strategic vision for the company? Who envisions what the company will be in three years? Who in management is minding the store?”
TMG’s Take is cost cutting strategies and reducing the number of managers affects both recruitment and retention. Talented people want to join companies that have more than a general plan for growth; they want to join companies with a real strategy for growth and with the resources to implement that strategy. Company executives must ask, is our story attractive to talented people who will make a real impact on our business? Is our current operating plan one our most critical employees believe in? The answers can make a huge difference in the competition for top talent.
TMG’s Take is a regular e-mail advisory produced by The McCormick Group. The company’s Government Contracting group combines the expertise of our knowledgeable consultants to help government contractors fulfill all of their recruiting needs. TMG’s Take covers topics across the spectrum of the government contracting industry, including business development, proposals, contract management, cyber security, compliance, R&D, technology, and finance. Please direct all inquiries to Brian McCormick, Executive Vice President at (703) 841-1700 or bmccormi@tmg-dc.com
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