Cutting muscle and bone

I remember that over thirty years ago, there was a massive Fortune 500 company that was one of the major employers in Western New York:  Eastman Kodak.  It was a “brand” that ruled much of the world’s photography, and as a company, it had a diverse set of businesses and industries it had extended into.    It was huge, powerful, and profitable.  Then came the 80’s, and things started to get tight.  Competition,  and changes in the business climate caused it to start to become … less profitable.  The stock market put pressure on the company to cut costs, to revamp, to do things to increase its stock price.   So, the chief executive did what was “expected.”  He sold off various divisions.    It didn’t work.  So he cut some more.  And again.  All according to what he – and the stock market – “knew” should be done.  Because, after all, you “cut the fat.”   The problem was that he kept cutting and as the market shifted away from film, the company couldn’t adapt.  You see, he’d cut all the “fat” research and development people, the new product developers,  and engineers.   A short time after he was (finally) fired,  a business columnist looked back at his tenure and said “his problem wasn’t that he cut the fat.  He also cut the muscle and bone.”

I’m reminded of this because of a recent event here in New York.  The Commissioner of the Dept. of Environmental Conservation was fired by the Governor.  A memo he’d sent to the Governor leaked, in which he was arguing against further cuts in his department.   One line in the memo stood out:

In contrast to the past, we no longer have a general capacity for incremental reductions.  All of the meat has been stripped from the bones, and some of the bones have disappeared.

It sounds just the same, doesn’t it?  It’s popular to rail against “bloated government workforces” and to call for reductions.  But there comes a point where there is no more “bloat” to cut.  At that point, you’re cutting into the ability of the agency to do its job.   Hazardous waste sites and spills don’t get cleaned up.  Fisheries don’t get monitored.   Building permits and public projects  are delayed.   Patrols and enforcement don’t happen.   All the things that people expect the agency to do either don’t happen, happen slowly or haphazardly.

It’s a lesson that is starting to be learned – again.  It’s not just this Department, or this State.  It’s happening across the country.  At some point,  people are going to find out that what they expect – what they need – their governments to do isn’t happening anymore.   Because there’s a point you have to stop cutting, because there’s no more “fat” – you’re cutting muscle and bone.


Comments Off on Cutting muscle and bone

Filed under Business, Politics

Comments are closed.