Four Mistakes Leaders Make When Downsizing

Back in June, I still believed our economy could finesse a soft landing, (BusinessWeek.com, 6/27/08) but it turns out I underestimated our ingenuity for screwing things up. A perfect storm of dumb borrowing and easy lending, runaway derivatives and credit default swaps markets, and wooden-headed congressional and regulatory oversight is bringing the world's most productive economy down hard. Buckle up, it is likely be a bumpy ride.

If you're in a market segment that won't be hit too hard, you're lucky. If not, though, recessionary pressure need not spell disaster. If your company has been prudent in its use of leverage, you might even pick up a few points of market share as your competitors batten down the hatches. Just be careful to avoid the following four common mistakes leaders make when scaling back.