Cost cutting is like dieting. If you do it sporadically, not only is it ineffective, but in the long run, you're likely to put on more weight.

Likewise, sporadic corporate belt-tightening is more likely to result in production backlogs, low-quality output, missed shipments, angry customers and diminished employee morale. Over time, it's going to cost the company far more than the few dollars saved from a one-time cost-cutting exercise.

So what's the alternative?

If you agree cost cutting is like sporadic dieting, then you'll see why you should resist setting a pounds-lost target and, once you've achieved it, celebrating with a banana split topped with whipped cream. You need, instead, to view dieting as a permanent change in lifestyle.

 

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