Situation: A company has run into a rough patch and needs to cut costs. The CEO is considering a number of alternatives, but wants to hear input from other CEOs on how they have faced this challenge. How do you downsize intelligently?

Advice from the CEOs:

• The key to intelligent downsizing is to take a different perspective. Look at the needs of the business in terms of a 3-5 year plan, not just at what is needed to do to survive today.
  • What key talent will be needed 3 years out? What key roles will need to be filled? Who is on-board today who will be needed in 3 years? How does this affect the decision on where to trim? Are there other options to simply laying off staff?
  • Answering these questions helps to consider options with a rational long-term view.
• Establish a new paradigm. What do you want the business to become?
  • Is it the same as, complimentary to, or completely different from the current business model? Once the paradigm is developed plan personnel needs in line with this paradigm.
• Look at all resources proactively.
  • For example, if you are considering moving your offices to a smaller space, look at your vision for the company 3 years out.
  • It may be more sensible to stay where you are and negotiate a new lease with your landlord that is more favorable short-term than paying for multiple moves.

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