The Powell Doctrine is to avoid war, using all the force necessary to achieve a decisive and successful ongoing result. Earlier, I wrote about applying that to business leadership. Here, let’s apply it to cutting back when you’re over-extended. Use the same steps, with a slight twist. The main point is to cut deeper than you think you need to so you don’t ever have to do it again.

1)   Get to the ground truth

Ground truth is unvarnished, unfiltered truth about the harsh reality. Start with the assumption that if things are not going well, things are probably worse than you’ve been led to believe. When organizations are in trouble, people go into survival mode. And people under stress narrow their focus and make bad decisions.

One tool to help you get at ground truth is range forecasting. Don’t tell people that you don’t believe their single point forecast for revenues, costs or timing. That just makes them defensive. Instead, ask for their 80% confidence range. A one million dollar estimate is different than “somewhere between $800K and a million” and “somewhere between one and two million.”

A second tool is a SWOT analysis. Look hard at your real internal strengths and weaknesses. Look at external opportunities and threats. Then:

  • Cross internal strengths and external opportunities to get at key leverage points.
  • Cross internal weaknesses and external threats to get at business issues.

2)   Set a decisive objective

A decisive objective at a decisive place and time is one which, if you gain it, you win – what Clausewitz called the “strategic center of gravity.” Retrenchment mode is different than growth mode. As long as you are sinking into mud, you’re going to keep going down. What you want is to plant your feet on bedrock and start your new ascent.

The trap is to try to do both at the same time. This is not about preserving the option to grow over the short term. It’s about getting to bedrock as fast as possible so you can grow later.

3)   Make decisive cuts at decisive places and time

The essence of strategy is the creation and allocation of resources to the right place at the right time over time. Generally, this is about concentrating your efforts to create a decisive competitive advantage versus your competition.

When cutting, you’re doing the opposite. Instead of focusing on your leverage points to create a decisive competitive advantage you’re trying to eliminate business issues to survive.

Triage your work efforts and people.

  1. Group 1 are things that are strong enough and don’t need your attention. Leave them alone.
  2. Group 2 are things that are in trouble and can be helped. Shore them up.
  3. Group 3 are things that are beyond help. Make them go away – completely. Make sure you’re cutting the money, the people and the work. If you don’t cut the work, someone else has to do it, putting more stress on them. And, people under stress make bad decisions.

4)   Prepare your troops for success

You don’t owe people lifetime employment. But it is in your best interest to help them succeed. This means helping them learn and develop skills they can apply throughout their careers. This means supporting people on the way out.

  • It’s the right thing to do.
  • What goes around, comes around. You never know when you might run into them again.
  • Everything communicates. Those left behind will pay attention to how you treat people on the way out as a sign of what matters to you and how you might treat them when it’s their turn.

And you need to help those moving into new roles. This means everybody because everyone’s roles are different after decisive cuts. Even if nothing has changed in their official roles, the changes around them mean they have different internal suppliers and customers and likely need to work differently.

Relook at or reconfirm their direction, bounded authority, new resources, and accountability.

5)   Be personally present at the point of decision

Deliver as much of the bad news yourself as you can. Utilize the Stockdale Paradox to combat denial –“unwavering faith that you can and will prevail with the discipline to confront the most brutal facts of current reality.” The people following you need to see that from you to help them believe in their own future.

Click here for a list of my Forbes articles (of which this is #638) and a summary of my book on executive onboarding: The New Leader’s 100-Day Action Plan.