In business, there are only two ways to turn a (greater) profit: increase revenue, decrease costs. It is, of course, much easier and more tangible to decrease cost. Costs are like a metaphorical concrete block. They’re just sitting there, all of them, right there in the L column of the P&L, constantly in view and offering reminders of their costliness, just waiting to be sculpted, crushed, or thrown out.
Profit, on the other hand, is the idea of increasing sales by striking out into new verticals. That takes vision, it takes creativity, and has an intangible quality, owing to the fact that those extra sales are still just an idea, a possibility, a figment of imagination that is yet to be realized. And as we have seen with the eagerness with which people are willing to take up AI, a lot of us, and hence a lot of managers, struggle with imagination and creativity. We’re seemingly more disconnected than ever from the reality of the steps needed to put an idea into motion.
So, since the new avenues for profit can’t be realized, it’s time to cut off your foot and start throwing out those concrete blocks instead to save some money. Like your foot, some of those concrete blocks were probably integral to the foundation of the structure your company is built on, but we’ll just close our eyes and worry about that later, and hope for the best.
This endless cost-cutting, of course, leads to a slippery slope of declining working conditions as the rug is pulled out from under everyone. Old heads burn out and leave in frustration. New hires, selected based on their willingness to be exploited and desperation for a job, are unaware of and unable to care about how things used to be. They are, after all, just glad to be back in employment.
Some costs, the right costs, are essential and important to the function of a business. And recognizing employees for their hard work and increased contributions with increased rewards is a core tenet of the employment relationship.
At some point, push is going to shove where rubber meets road, and when this employer revoked the bonus incentive for employees to work holidays, they quickly learned the meaning of the word “incentive” when no one decided to work on those days when there was no promise of extra reward.
Author: Kayitsi.com
