We had to cut a hundred million dollars from the business, and we had 30 days to tell corporate how we were going to do it.

That's a lot of money. It was a huge amount of money.

 

Louise Francesconi—former Fortune 500 Division President—was responsible for cutting the funds required to ensure the organization could continue to be a viable business. They were forced to consolidate because the business was in such bad shape. That meant a huge amount of change, integration, and results—all at once, in very little time.

 

Arbinger’s work with organizations often starts right here, when the stakes are so high, a company recognizes they cannot afford to fail.

This was also the case of another client—a multinational headquartered in Europe.

 

Mike Merchant:

The CEO of a very large manufacturing company called up Arbinger and said, “Hey, we need help. We have to cut $100 million out of our budget. Can you help facilitate that process?”

 

Mike is one of Arbinger’s most experienced consultants, often called in when companies face high-pressure challenges.

Don’t be confused—this is not Louise’s company. It’s another company with the same mandate: cut $100 million, but don’t hurt the business.

 

I’m curious what it’s like for you to go in, knowing you’re the person brought in to help facilitate the success of this?

 

Mike Merchant:

It’s a little unnerving, especially when they’re worried about whether it will work. They were a nervous wreck: where is this going, will we get there? But they know their business better than I do. I don’t have to be the expert—I just have to trust in the material and trust the people. If we get people working collaboratively, focused outside themselves, I know we’ll unlock solutions, creativity, innovation. I don’t always know what it will look like—but we’ll get there.

 

That’s a lot of confidence for someone whose job is to help facilitate something as high pressure as cutting $100 million.

But it doesn’t have to be $100 million. The real question: how do we navigate high-stakes challenges when jobs are on the line and the margin for error is razor thin?

Today we explore how two clients on different continents took on the herculean task of cutting $100 million by working with an outward mindset.

 

Welcome to Leading Outward, the Arbinger Institute podcast, where we explore the tools and ideas we've used for over 45 years to help people solve their toughest leadership and organizational challenges by leading with an outward mindset—seeing people as people. I'm McKinlay Otterson.

 

When we got there the first morning, I was able to talk to the CEO at a quarter to eight and said, “What problem are you facing? We’ll solve it in two days.”

 

Duane Boyce—the senior consultant from Arbinger—was the one Louise brought in to help her and her 25 vice presidents tackle this challenge. (For Louise and her team, Duane filled the role Mike did with the other client.)

 

The CEO said, "It's confidential, but we're being bought by another company. As part of the purchase agreement, we have to reduce our cost base. I think we can get $20 million of that by layoffs. That's my biggest problem. If we can solve that—come up with $20 million in savings in layoffs in the next two days—and that savings has to hit the bottom line before the purchase agreement is signed."

 

So Duane set up the meeting. Each person focused on what they’d do to contribute to cutting $100 million.

Everyone briefed their plan. It was painful. As they worked, they realized—they weren’t going to make it happen.

 

We pause Louise’s story here to jump over to see how Mike starts out his session with the client in Europe.

 

The two main objectives:

 

Get alignment from everyone that they actually need to cut $100 million.

 

Cut the $100 million.

 

So they started off just like—how would we tackle this with an inward mindset? How with an outward mindset?

 

Start in the Right Way is a simple but powerful exercise: as a group, think through how self-focused behavior impacts a meeting or project, then flip to consider how it looks with an others-focused mindset.

 

Mike pulled up the list the team generated—

Inward mindset:

 

Someone else’s problem

 

Problems outside our influence

 

Not open to other perspectives

 

Cannot change

 

Blame

 

“I’m better than others”

 

Defensiveness

 

Not thinking about impact on others

 

Not accepting reality

 

Pass it on to customers

 

When the idea of passing it on to customers came up, half the room thought that was the best solution; the others said they'd done so much already and it would harm competitiveness.

 

Outward mindset:

Focus on solutions, not problems

Work together as a team

Openness

“How can I help?”

Ownership

Connectedness to solutions

Develop with others

Stay calm

Safe to speak up

Listen and seek to understand

Respect perspective

 

With that, the team committed to be outward. That tone-setting was exactly what was missing with Louise’s team: she’d asked what each person would contribute, but under pressure, people naturally go inward, wanting to protect what’s theirs. Only when you address mindset first do other possibilities become visible.

 

Back to Louise and her team, who are stuck and know they need to do something differently.

 

Duane steps in:

"Louise, can I help shape this meeting differently?"

She agrees—they’re all so deflated.

 

He tells them to pair up. Who pairs with who doesn't matter—just pick someone. Two hours are spent as pairs.

For the first hour, each shares everything they're working on and where they need help. For the second, each asks the other: What could you do, from your resources, to help the other person save money—not cut their money, save their money?

 

They start thinking in terms of helping each other, not just themselves. After a couple of hours, the most dominant VP raises his hand:

"I think we should change our goal. The goal should be to save $20 million without laying off anyone."

Everyone is jubilant—now they see new possibilities. Planning moves from layoffs to finding savings creatively and collaboratively.

 

Meanwhile, Mike's client group is still divided with a narrow view. The finance officer and manufacturing leads present data: unless $100 million is cut, targets won't be met. There are contributing factors, and discussion opens up—everyone has different perspectives.

 

Mike:

He proactively connects with anyone he thinks might be resistant by phone before the session. The more people feel heard before the meeting, the less time spent on resistance during it. It’s also helpful having a physical Arbinger presence in the room—people behave better, and there’s accountability.

 

Session progress:

Everyone wants to protect their own interests, and resistance is high. The sooner Mike can get them thinking strategically—“playing chess”—the better.

 

Crucially, neither Mike nor Duane supplies the business strategies. The ideas are already in the teams. When people are heads-down, thinking only about themselves, they can't see them.

 

So, Mike puts people in small groups:

 

What’s the short-term way to mitigate each contributing factor?

What’s the long-term business change to address it?

 

Reporting out:

Alignment increases—everyone gets a voice and feedback, ideas are added to the chart, and finally, they have options.

 

Examples:

 

Effort to cut manufacturing footprint was slow due to slow decision-making—could they localize decisions?

Outsourcing was expensive—could they optimize internal assets?

R&D footprint was too big—they needed to focus efforts.

Sales and supplier relationships needed collaborative solutions.

Inefficient meeting structures led to wasted money—tracking time spent in meetings versus productive work was another way to save.

 

Instead of passing the cost to the customer, they identified practices that would truly change the business.

 

Next, Mike invites each team to report their plan, the dollar amount identified, and their three biggest challenges.

Why focus on challenges? Because that's what invites collaborative helping.

 

Small group discussions refine plans. The financial officer keeps a running tally—are we meeting the $100 million?

After all the work plans, they are $34 million short.

 

With only half a day left, Mike focuses on loss-makers—products or services that lose money but build customer rapport. Passion projects were on the table, but because the team was collaborative and accountable, they could objectively discuss what to change.

 

They closed the gap, ending up with short-term strategies to reach $100 million and long-range plans to keep their business sustainable.

 

They did not pass the cost to the customer.

 

Remarkable:

Half of the executives thought the only solution was to pass costs to customers. The others didn’t know what else to do. Yet, through highly collaborative, outward-focused work, they created enough ideas to cut the entire $100 million without passing it on.

 

Louise and her team’s outcome:

 

It was like magic.

At the end of the day, we cut over $100 million—and not one person felt they had sacrificed, because everyone was focused on helping the others succeed. It radically reshaped the business.

 

Anytime people hear, “Focus on what I can do to make you successful,” it sounds like a platitude. But in the context of a real problem, it radically transforms a business. The results come quickly, but the real change is in how teams interface.

 

It taught us the power of listening and understanding what it truly means to help others succeed. We’d understood the idea intellectually, but not the power until then.

 

Most of us are trained and rewarded for being clever ourselves—to solve our own problems, find our own solutions. It’s hard work to focus on others’ results. Both paths—self-focus and outward-focus—are demanding, but only one truly works.

 

As the European company’s work wraps up, everyone owns what needs to be put in motion. The CFO, the most nervous, says:

"I’ll never underestimate the power of coming together as a team to solve a problem. That’s how I’ll lead going forward."

He is now the new leader there.

 

The CEO, at the very end:

"I will never make a one-sided decision again."

 

He was so pleased with the engagement and the solutions the team identified. He later retired, saying the experience was one of the most meaningful of his career—bringing the team together to make difficult, but collaborative, business adjustments.

 

The personal discoveries of these leaders are profound. But what's more remarkable is their direct translation into business results:

 

$100 million cut, no costs passed on

Concrete, sustainable business plans

 

—

 

For Louise and her team: "We doubled the business in a time when people didn’t think we could grow 5%. Some say it can’t be repeated. They’re wrong—it’s the way you go about it: hard work, working the right way."

 

Leading Outward is produced by the Arbinger Institute, the premier provider of leadership development and organizational transformation. If you're ready to build high-performing teams that drive results, explore our solutions at arbinger.com.