Avoid the Haircut: Sustaining R&D in Difficult Times

By |2017-05-23T15:42:09-08:00March 10th, 2012|Blog|0 Comments

They are dark times indeed when each day brings another tale of an industry stalwart shedding 1,000, 2,000, or even 10,000 jobs. It is especially daunting when companies are forced to make those cuts within research and development, the lifeblood of innovation and long-term survival.

To our minds here at Enrich, there is an even greater tragedy: Many companies see staff reductions and cost cutting as a tactical measure, and thus lose out on the opportunity to refine and deploy a strategy that will yield real dividends in the long term. Companies like Intel and IBM who stayed on-strategy during the 1982 recession, for example, led the personal computer revolution later that decade.

The path of least resistance for executives is to tighten belts across the board. The executives will call for a 5, 10, or 20% reduction in spending in all divisions or functional areas. We call this a haircut because we’re just ‘taking a bit off the top’. Expedient and democratic, right? Perhaps, but there are several fundamental problems with this approach…