But also take a differentiated look at costs. Far too often, in order to increase earnings, savings are made first where costs can be cut most easily. All too often, this is the commercial workforce. Staff cuts in the commercial sector have a positive effect on earnings in the short term, as long as no capacity utilization is achieved. Don’t kid yourself, though: It’s a bogus solution. Consider where in your business the added value is generated, and what skills and experience you are “throwing overboard” as a result – apart from social aspects. The problem often lies somewhere else: perhaps in sales, perhaps in marketing, perhaps in product management, perhaps in product development, in the wrong business model or in the wrong strategy or in a wrong investment. A reduction in commercial capacity diverts attention from these issues. Often, these causes are not worked on because “the problem” seems to have been solved. A downward spiral is initiated.
Example: A plastics processing company with formerly more than 500 employees was sold 20 years earlier by the well-managed French Arkema Group to a private equity company. Since then, the company has not been managed strategically; rather, the new shareholder continuously deprived the company of the cash flows it generated. Sensible investments were not released. When financial bottlenecks occurred, the workforce was regularly reduced. After 20 years, the workforce consisted of just 100 employees, without the company having stabilized economically. The issues relevant to the future remained unaddressed.