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Cutting people is an unfortunate but extremely necessary part of doing business successfully.  Yet it is one of the most misunderstood and fucked up of all business processes.

While this post may seem harsh, it is certainly not intended to be. Effectively managing personnel, on the way in and on the way out, is simply vital to the success and health of any business.

I was inspired yesterday by responses I was seeing and reading to – which are generally great by the way.  The classic refrain: in these tough times, we need more teachers, not less, etc. etc.

Wrong.  In these tough times, we need less because we can afford less…and we’ll actually get more.  This is the perfect time to trim the fat, get more out of what we have and reallocate resources and people more efficiently rather than propping up the system to simply avoid the pain.  Just look at the productivity gains reported yesterday with today’s slimmer workforce.

Don’t get me wrong, unemployment is a very bad thing, perhaps the worst issue our economy faces right now, but feeding a broken system is not how you solve it. Innovation, retraining, reallocation and productivity gains is how.  And remember – these things takes time.

I can’t tell you the number of times I hear about folks worried they’re cutting into necessary bone when they trim from their workforce.  "Productivity will be killed.“  "We need to find somebody to replace them first.”

Exactly the opposite.  Eliminating unnecessary and especially unproductive and/or destructive forces in the office breeds focus and actually increases camaraderie and productivity from the remaining folks if done correctly.  In fact, I’ve seen more companies run out of money and die because they didn’t move quickly enough than the opposite.

This is one of most important lessons I learned running a business.  I was shocked how we didn’t miss a beat when we unfortunately had to let people go.  Counterintuitive, but proved absolutely true.

Trimming the fat should be practiced not just when necessary, but on an ongoing basis as well.  Managers should evaluate their headcount at least annually, preferably quarterly, with this discipline in mind.  And on the individual level, the day you think someone needs to go you’re already one day late in doing so.

When organizations get too big, they get bloated and sloppy….just like people do.

While we start as lean startup, we should continue as lean company.

I’ve stewed on the net neutrality issue for some time, not wanting to jump into the fray just to do so.  This morning, however, I had a great conversation with a couple of my colleagues at breakfast where it finally crystallized for me.  It comes down to this:

The Internet is our generation’s equivalent of the highways.

The Internet is the road upon which we travel, learn, interact and transact.  In fact, it’s power is in many ways even more important than that of the actual roads.

Anyone who knows me knows I’m an ardent capitalist.  But I have come to believe that having world-class, high-speed broadband Internet is a fundamental societal need that should be regulated as such so REAL capitalist innovation can be built on top of it.

After all, what are we trying to protect?  A few cable and phone companies?  A few hundred billion dollars of market cap?

We can make up the losses felt by a regulated cable industry in spades with the innovation that is being and will be built on top of the network.

The cable and phone companies were amazing businesses for their times that benefited greatly from private market financing.  But they do not have a God given right to monopolize and protect their turf.  If they want to grow, they too have to innovate.

It’s time to recognize that the innovation layer rests on top of the Internet, not in it. That’s where the value creation will come from, and we need powerful accessible broadband to get there.

Radical as it may sound, and don’t see this happening any time soon, but I’d rather have the cable companies look more like the power companies than stifle any innovation.

We’ve crossed that chasm.