#378  from Innovative Leader Volume 7, Number 12          December 1998

FORUM—from our readers

They Blew It!

Like many other companies, we have to stretch our dollars. We needed to quickly cut costs as one of our main customers no longer required our services.  This came to us as a surprise.  Executives demanded that all budgets had to be cut 15% beginning immediately.

As a group leader, I was faced with tightening a budget that already was very tight.  Among other cuts, I eliminated our normal bonus program, fired two low-level employees, didn’t replace two retirements, and kept a bunch of old computers that were due to be replaced. 

I also got rid of my small “entertainment” fund that I mainly used for taking one, or a few, of my staff out to lunch.  This was valuable in that we had uninterrupted and relaxed chats about work.  It was one way that I could really get to know the people who worked for me.  They appreciated the treat, and reciprocated by putting their energy into achieving our goals.

While I wasn’t happy about this surprise budget cut, I proceeded without complaint.  If we need to be extra tight, so be it.  While these lunches have been cut back, I still treat them to a meal, but now use my personal money.  It’s worth it.

Six months after this belt tightening exercise, I was invited to present my group’s achievements at the annual three-day executive retreat.  This meeting took place at a very expensive resort.  The executives treated themselves to hot-air balloon rides.  These rides, golf fees and meals, with very expensive wines, were charged to the company.  I was only there for my presentation and dinner, then I had to leave.

What is my attitude now to the cost-cutting edict?  How can I accept belt-tightening when the executives don’t seem to tighten their own belts?  I’d love to tell my staff about this, but I know that they will then take their sacrifices less seriously.  That would only damage my group. 

I have to admit that I’ve lost enthusiasm for my company.  It is clear that the executives also don’t have much enthusiasm for it.  Guess what the main subjects were at that one dinner I was treated to at the retreat?  Executive perks, which place is most luxurious for the next retreat, and remodeling executive offices. 

I no longer like working here.

Anonymous