Almost like moderate gains and taking care of employees takes care of the business. I’m baffled at how many CEOs force bad decisions in terms of immediate profits.
Because cutting costs is a very quick way of showing you are improving the bottom line in the short term and you get a bigger bonus that quarter. It is very easy to show savings from things like layoffs. Improving sales is harder to identify (was it the products? advertising? a mystery trend?) and take longer to appear on their charts. You’ll likely jump ship for the next job before the damage from your cuts shows up anyway.
I find that privately held companies tend to be better because the owner identifies personally with the business, it is “their baby”. They want to see it grow over their lifetime even if it means going slowly but steadily. With public companies the execs and board are brought in to increase profits regardless of the means and their timeframe is by the yearly quarter. There isn’t a strong mechanism to push them to focus on long term growth or stability. An exception are private tech startups that seem to focus on growing just enough to get the attention of a bigger company to give them a nice, fat offer and sell out and ditch the employees and customers.
Almost like moderate gains and taking care of employees takes care of the business. I’m baffled at how many CEOs force bad decisions in terms of immediate profits.
Because cutting costs is a very quick way of showing you are improving the bottom line in the short term and you get a bigger bonus that quarter. It is very easy to show savings from things like layoffs. Improving sales is harder to identify (was it the products? advertising? a mystery trend?) and take longer to appear on their charts. You’ll likely jump ship for the next job before the damage from your cuts shows up anyway.
I find that privately held companies tend to be better because the owner identifies personally with the business, it is “their baby”. They want to see it grow over their lifetime even if it means going slowly but steadily. With public companies the execs and board are brought in to increase profits regardless of the means and their timeframe is by the yearly quarter. There isn’t a strong mechanism to push them to focus on long term growth or stability. An exception are private tech startups that seem to focus on growing just enough to get the attention of a bigger company to give them a nice, fat offer and sell out and ditch the employees and customers.