When facing challenging times, strategy and employees are critical. In his book Responsible Restructuring, Wayne F. Cascio differentiates between companies considering employees as costs to be cut or assets to be developed. Companies pursuing a visionary strategy with employees as the most important asset have a great chance to excel in tough times because they are likely to restructure more cleverly.

Imagine the company “Great Supplier” provides semi-finished products for business-to-consumer companies. It is hit by today’s market environment and needs to react. This strategy remains: to be the No. 1 or 2 provider of cutting-edge products to its customers, generate sustainable return for its shareholders and earn the respect of the communities it interacts with.

Great Supplier wants to achieve this strategy via innovation, customer focus, profitability and talent. It also wants to live its values: integrity, leadership, respect and environmental responsibility.

Great Supplier produces three product lines: one high end, one standard and one low end, with differences in the service provided, not in the product sold. It provides technical service and joint product development with customers. The company wants to grow its business 5 percent per year, a revenue increase from $3 to $3.15 billion in 2009. But due to the economy, customers are delaying and canceling orders, so adjusted results reduce revenue 8 percent, down to $2.75 billion, with a recovery to 2008 levels by the end of 2011 at the earliest.

The leadership team has decided that since the amount of planned investments and dividend payments on top of anticipated cost is based on the increased revenue, it needs to find ways to cut costs to yield enough money to satisfy the shareholders and ensure Great Supplier’s future. It looks deeply into the financial figures and notices some interesting facts missed in the past.