Close this search box.
Close this search box.

You Can’t Cut Your Way To Growth

cuting costs
© AdobeStock
Cost controls are prudent, but the service-to-sales dynamic, where traditional service roles are interwoven with sales functions, is even more valuable.

The possibility of a looming recession is bound to make every CEO nervous. But it’s a particularly sensitive time for a particular kind of leader: those at the helm of growing companies anxious about a softening economy.

The temptation is obvious: If you see dark clouds on the horizon, why not start cutting now in order to better ride out the storm? That’s certainly been the strategy for lots of big name companies contributing to what’s currently being called the white collar recession.

The problem is that prudent cost controls have a way of making things worse, not better. You can’t cut your way to growth, but you can leverage your strengths to get there.

Consider the service-to-sales dynamic, where traditional service roles are interwoven with sales functions. Crucially, this allows support to operate as a profit-and-value center, instead of just being a last resort for customers and a drag on profits. There’s often a lot of expense in service and a lot of pressure to cut when times get tough.

What’s lost in this thinking is the opportunity that also exists—to not just maintain service to sales, and potentially keep more of your customers, but to grow those customers as well.

Too often, when companies are dealing with customers or clients, the bulk of their time together is through a service center that, by definition, represents a point of demand failure. Something has sufficiently failed for the customer that they’re willing to call or reach out through the website.

Cutting that point of contact does nothing for that frustrated customer, except maybe make them even less satisfied with your product or service before they walk away (and potentially share their dissatisfaction with the world).

But retaining the model and leveraging it offers the possibility of the opposite outcome. Yes, it costs money to hire, train and support staff whose job it is to interact and solve the problem. Knowing that the problem exists is the point of leverage that would be lost without it.

The only way to preemptively resolve an issue is to be aware of it in the first place. The only way to know what you need to react to is to have data that points you in the right direction.

If you can begin to understand the trigger points for engagement, you can actually reach out and protect value with the customer, rather than sitting back and waiting for it to decline slowly and inevitably.

When your product or service fails, there is a distinct cost associated with just receiving that challenge and solving it. An abandonment of service to sales, or even a modest haircut in employee count, can reduce or eliminate the potential not only of finding a positive solution, but of shifting the entire model from cost to profit.

To be clear, these sorts of tough calls exist in every macro environment. Even when times are good, unfocused hiring can do nearly as much damage as the undisciplined layoffs that occur amid inevitable weakness.

No matter the environment, though, blindly cutting what on paper looks like a cost–but, with effort, could represent something more–will never be a recipe for growth.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.