CEOs Done With Cost Cutting
from the now-focused-on-cost-raising?? dept
A new study from IBM is being used to suggest that the economy is coming back. They asked a bunch of CEOs what they're focusing on now and discovered that after years of focusing on "cost cutting", CEOs are done with that. Now they're focusing on revenue generation. While the article talks about what this might mean for the economy, I find it more interesting to think about what it says about CEOs (or whoever put through this study). It seems to reinforce the silly single-minded approach to running a business, where you can only focus on one side of the cost-benefit equation at a time. In the boom years, companies only focused on revenue generation, ignoring the cost side. Since the bubble burst, it's all about controlling the cost side, without any concept of how cutting costs harms revenue generation. Now, the pendulum is apparently swinging back. At what point do CEOs realize there's more than one side to look at, and start viewing both sides together and making more informed and balanced decisions?
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Reader Comments
Subscribe: RSS
View by: Time | Thread
No Subject Given
Now the stupid suits have finally figured that you needed to keep some developers and marketing people to have a product to sell!
[ link to this | view in chronology ]
Not necessarily brain-damaged!
First of all, your company could be in trouble, so you don't have time to grow the business before it runs out of cash. So you have to get your burn rate below the income rate and hope that you keep the business running in the mean time.
Secondly, and this is the worse one, the markets may have "fashion" and may penalize you for certain kinds of investment. So yes, although you're always pedalling and steering at the same time, you may need to emphasize one or the other in order to 1> get all employees on the same page and 2> get the market to understand what you're doing.
And while we may say that the best businesses should just ignore the markets and run themselves the "best" way possible, if you need more capital with which to grow you can't ignore market fashions.
There are other reasons too, but these are the big top 2.
[ link to this | view in chronology ]