Small companies are nimble and respond quickly to their customers’ needs. Big companies can take on large projects and provide a wide range of products. But what happens when a big company downsizes to become a small company? Does it regain its nimbleness or does it end up as the worst of both worlds?
Having been through several downsizings, I have to say that it’s a little like lovers trying to go back to being “just good friends”. It’s not impossible, but it takes a complete change of mindset.
It isn’t enough to look at the budget constraints and downsize until the gap between revenues and expenses has been closed. You have to have a new vision for the resulting company and ensure that you have the right team in place to carry out that vision. Although it involves a lot of pain for everyone involved, the right long term answer might be to cut deeper than you have to in order to give yourself room to bring on the new people you need to move ahead.
As we move forward into uncertain economic times, the possibility of increasing inflation and taxes, accountants will be called upon to raise difficult questions of corporate sustainability. Courage!