The author discusses how companies have shifted from solely focusing on cost reduction during the recession to now prioritizing growth while still maintaining expense control. During the recession, CEOs cut staff down to essential performers focused on reducing costs. Now, CEOs are using their best staff to grow revenue through new products and acquisitions as optimism has risen. The author calls the current environment the "Zone of Cautious Optimism" where growth is prioritized but not at high risk. CEOs are shifting top performers from cost cutting to growth initiatives while still finding savings through external resources paid for performance to avoid costs of new employees. The author asks companies which zone they are in - growing the business while maintaining expense control or being caught

1. The Zone of the Shift<br />Over the last two years, many CEO’s and CFO’s have focused their company’s efforts on cost reduction, saving cash and hoping to last long enough to outpace the recession. During this period, they cut back on their most expensive area, compensation, by reducing staff to a minimum. Only the best performers who were dedicated to the business were left, and they were given assignments that kept them involved in reducing costs. <br />But I am beginning to see a shift . . . Over the last few months my clients seem to be more focused on growth and using their best people in their organizations to grow revenue, introduce new products and grow externally or organically through equity, debt and/or acquisition. They sense the change in the economy, the more positive attitude of the consumer and that America is truly the strongest economy in the world. I hear other consultants stating the same about their clients! <br />So where are we now? We have entered what I call the “Zone of Cautious Optimism.” We feel better about the future, but not so optimistic that we are going to hire full time employees or make higher risk investments. We know that we have to grow so we will shift our best employees from assignments that kept them involved in reducing costs to a more serious challenge: Grow the business. <br />But there are still savings to be had and you need someone to address the opportunity to improve earnings by continued expense management. What I am seeing is that smart CEO’s and CFO’s are using external resources to get at these savings. They are obtaining the services of external resources that are paid for performance, avoiding the occupancy, benefit and compensation cost that they may incur by internally adding a non performer. They are also outsourcing some of the more mundane tasks to free up their existing staff. They are looking for ways to better engineer sales and finances.<br />So now I ask . . . which zone are you in? Are you making the shift toward growth while you leave the back door open to increasing expenses, or are you doing both -- growing the business while keeping a lid on your expenses? Don’t be caught in the “Zone of Uncertainty” when you need to shift towards growth!<br />