What’s Behind the Numbers?
I was speaking with the managing partner of a law firm about managing expenses during this recession, and I was impressed by his rare combination of business acumen and sensitivity to people issues.
The specific issue was that his CFO is on a slash and burn tear, wanting to cut expenses without regard to context.
In particular, it was clear that the CFO was in the dark about the “back story” behind the human capital that he recommended cutting, while the MP was aware of all of the nuances.
Of course it’s important to manage expenses during this environment – frankly, we should manage expenses in the good times as well – but you can’t make cuts without truly understanding what you’re cutting and what the implications are.
I know firms that have cut reactively so close to the bone, that when the recovery comes, they will pay a price to catch up.
It’s not just about the numbers – it’s what’s behind the numbers.
