• Learn why across-the-board 'fair' budget cuts can create missed business opportunities.
• Discover how Playmaker CFOs can leverage budget cuts to stimulate long-term growth.
• Uncover the four questions every CEO should ask their CFO before approving the next round of cost reductions.
Here's a stat that should make every CEO pay attention: according to Gartner's Q3 2025 CFO Report, half of all businesses are planning to cut costs this quarter.
If your organisation is one of them, your CFO's response will determine whether that presents a problem or an opportunity over the long term.
If they're stuck in Firefighting mode, they'll likely greet the news with grim resignation and see it as another burden to trudge through.
Playmaker CFOs will see it differently.
As I covered in my previous blog series, >>The Antifragile CFO, budget cuts can be the best thing that ever happens to an organisation. If they're managed well.
The Fairness Trap
There is nothing quite like a round of cost-cutting to force an organisation to decide what it values.
A Firefighter CFO might be tempted to apply cuts indiscriminately, in the name of fairness. They'll default to what's measurable and defensible. And in a risk-averse environment, that often means fair, across-the-board cuts.
However, this would be a mistake. When you make cuts across the board and everyone "shares the pain equally," you're not making strategic choices at all. You're just making your business a little bit worse at everything. Including the things that could potentially set you apart from your competition.
A 10% cut to your innovation team likely has a radically different strategic impact than a 10% cut to facilities management. One weakens your ability to differentiate in the market. The other might finally force that long-overdue vendor renegotiation.
But what if your facilities are so run-down they're hurting productivity? What if one of your strategic priorities is to attract higher calibre talent, and the thing dragging down staff morale is their working environment?
That's why it's so important that the CFO lives and breathes the company's strategy. Without knowing intimately where the business is headed, they risk steering the ship off course.
Cut to Differentiate
Cost discipline doesn't necessarily mean doing more with less. In an antifragile company, it means doing less of what isn't mission critical so you can do more of what is.
Gartner's advice in their most recent CFO Report is clear;
1. Take cost out
2. Reinvest savings
3. Improve outcomes
4. Drive business impact
When you follow this model, a cost cut doesn't necessarily mean that you must shrink the pie, it can mean that you reshape the pie by reallocating capital towards the projects and capabilities that create competitive advantage.
So if you are one of the 50% with a budgetary challenge, ask yourself:
1. Does this spending create competitive advantage?
Notice that the question is not "Is this important?" Everything is important to someone. This question forces you to reflect on whether the spend makes your business harder to compete with.
2. If we cut this, what do we become worse at?
Every cut has consequences. The question is whether those consequences erode something that impacts your competitive position. Cutting travel for your sales team might save money, but if it makes you worse at building client relationships, and relationships are your differentiator, that's a bad trade. But cutting a legacy product a segment of your customer base is sentimental about might not matter if you replace it with something that better meets their needs that nobody else offers.
3. What would we need to believe for this spending to be justified 18 months from now?
This question forces clarity and surfaces all your assumptions. It makes you articulate the logic connecting the spend to future value.
If you can't tell a compelling story about why this spending will matter in 18 months, cut it. If you can, and if the logic is clear and the assumptions are sound, protect it. Even if it's painful in the short term.
4. What would our most dangerous competitor do in our position?
Your smartest competitor isn't being 'fair.' They're making hard choices. They're betting on their strengths and cutting everything else.
What would they do with your budget? Where would they double down? Where would they zero out spending without hesitation? Use that as a benchmark. If your competitor would happily cut something you're agonising over, that's probably a sign that you're making a decision for emotional rather than financial reasons.
When Everything's a Priority, Nothing Is
Antifragile companies are radically clear about what makes them different. And sometimes a round of budget cuts is the perfect opportunity to reflect on what that is.
So perhaps now is the time to ask yourself:
If your CEO asked you to make budget cuts tomorrow, what would those choices say about your organisation's values?
And would those cuts strengthen or weaken your competitive position in the long term?
I'd love to hear your thoughts.
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