Most of us know that if we set out to lose weight, a crash diet usually just works in the short term, what we really need is a change in lifestyle, or at least, some aspects of our lifestyle.
Why then is it that in corporate life we usually take the crash diet course?
There have been lots of headlines over the last few weeks about the probability of job losses in the banking sector, a response to the looming financial difficulties. The financial services sector has been doing very well, record profits despite the problems of a couple of years ago, and have been adding jobs, close to 40,000 over the last decade, and now they need to diet, so “crash” find 10,000 to cut.
Surely the problem is one of an ageing business model, in personal terms, too much junk food, not enough veggies and exercise, so now the management reaction is a commercial crash diet. History suggests there will be a lot of pain, and long term, little or no gain.
Those customers whose business is down the shallow end of the banks customer Pareto, the SME’s who are really the engine of sustainable growth in the economy will now find it harder to borrow. The banks are tightening the screws because of their crash diet, so there will be no-one to understand their SME customers business and consider their funding needs, and requests will be reduced to decision by an algorithm. Both the banks and the SME borrowers will lose under these conditions.
Pretty soon, hopefully, someone will realise the problem cannot be solved with a crash diet, it needs a lifestyle change, and only when that happens will sustainable recovery of commercial fitness be possible.