Tackle the problem early – Why SME CEOs wait too long

Many companies are managing to stay afloat through short-time working. This eases the pain, but does not cure structural defects. Several thousand jobs were already lost in the first half of the year – and the trend is upwards. Nevertheless, many CEOs are shying away from making tough cuts. They do not want to unsettle anyone or cause panic.

But the truth is this: those who delay the pain only make it worse. The principle is simple – and brutally honest: cut early, cut deep, but cut once and for all. Restructuring, relocations, cost discipline, pressure to innovate – unpleasant, but there is no alternative. Swiss companies, particularly SMEs, find this difficult. The cushion provided by past years is too comfortable; decision-making processes are too sluggish. ‘Let’s wait and see’ sounds sensible – until the competition overtakes you.

Innovation pipeline: usually empty

Many SMEs do not have a well-stocked innovation pipeline. And instead of testing new markets or business models, they are merely managing legacy issues. The instinct to rely on short-time working, reserves or the next economic cycle runs deep. Yet the world is moving faster: shorter product cycles, new competitors from Asia, geopolitical tensions, rising financing costs. In this fast-paced environment, it is not the biggest that survives, but the quickest.

In times of crisis, it becomes clear who leads – and who merely manages. Two leadership styles clash:

• Some make swift decisions, implement them and take responsibility.

• Others launch surveys, workshops and project teams – and waste valuable time.

Many executives in this country confuse consensus with leadership. Yet a turnaround does not mean getting everyone on board – it means saving the company.

The true cost of hesitation

Of course, a change process comes at a cost: consultancy fees, reorganisation, loss of productivity and friction losses. But the opposite – doing nothing – is even more expensive. The costs of inaction do not appear on any balance sheet: lost market share, demotivated staff, gaps in innovation. Those who restructure too late pay twice – in money and credibility. A CFO recently remarked dryly: ‘We started the change too late. Now we’re paying interest on our hesitation.’

For decades, Switzerland was a bastion of stability – economically, politically and socially. Yet in times of ‘compounding crises’ – the pandemic, supply chain issues, tariffs and energy prices – stability is no longer a guarantee, but a risk. Many board members underestimate the fact that prevention is harder to manage than reaction. When a company appears to be doing well, hardly anyone understands why it should restructure. Yet that is precisely when the best leaders are needed – those who act before the figures take a turn for the worse.

‘Take the pain early’ is not just a buzzword from management theory – it is a survival strategy. Those who restructure now, streamline processes, accelerate innovation and tap into new markets stand a chance. Those who wait and see will be overwhelmed by the next crisis.

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