by Peter Moroney

Created on: June 28, 2009   Last Updated: July 09, 2009

May you live in interesting times the Chinese say, meaning it as a curse. For the Chinese 'interesting' is clearly a sinister concept, and in this day and age it's easy to see why.

Turbulence has become a fixture in modern society. The most violent and unpredictable century in human history has recently ended. The rise of incredible technology, social and environmental issues, the opening of borders and the turmoil of the global economy are issues we have learned to live with. The world has changed forever and continues to change in exciting, scary, quantum leaps.

Change may be a fact of life, but it is not always well managed. People cling to what they know. They harken to familiar routines, they respond best to what they are used to. Change is too often associated with uncertainty; and uncertainty too often leads to doubt and timidity.

If people are like that then so too are many organisations. At the first sign of strife the reaction is predictable: batten down the hatches and ride out the storm. In the worst scenarios budgets are clipped, salaries frozen, jobs are lost. Discretionary spending is reduced, if not eliminated altogether, and innovation takes a back seat.

This may not be an entirely wrong response, but rarely, if ever, is it entirely right.

Consider for a moment the situation. Let's say you're suddenly faced with a shrinking market that's getting smaller all the time. Your revenue abruptly slows and falls away to levels where current expenditure cannot be maintained. It's at about this point that most companies jerk on the emergency break. It's simple really though, isn't it? Cut expenditure.

So what goes first? Those services, those nice to have things that are easily managed when times are good, are the first things to be jettisoned when the market sours. But that's not enough. So then you start looking at people what better way to reduce expenditure but by reducing the payroll? And so soon enough Tom, Dick, Harry and so on are regretfully shown to the door. Combine that with some prudent belt-tightening and that might be enough but where does this leave you?

In exercises such as this it is important not to go too far too quickly. Sure, action must be taken, but it should be considered, it should be planned, and it should be methodically executed. Above all it should be balanced.

Cut too deep into the human capital your company possesses and you run the risk of processes and systems breaking down when you take factors out of the equation

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