Well, praise for cost-cutting probably isn’t misplaced, but it may not be understood all that well. When a company cuts costs to drive efficiency in operations, the cost reduction can often be a good thing. Many companies, in times of plenty, grow beyond the edges of what should be comfortable. But those operational cost cutting measures may not serve so well when it comes to innovation and customer relationships. Deflecting a customer account to a new account manager can create a relationship reset. Cutting customer facing employees may also reduce corporate learning. The reduction in inputs reduces the combinations and permutations of ideas.

So when BusinessWeek looks for upbeat forecasts (read more here) they may be right. Cost cutting is being praised, but that is because investors are short sighted. Organizations need long-term investments to stay nimble. It isn’t just about getting out of one’s own way, its about having the limbs, the heart and the brains to navigate change. Cut too deeply and you run the risk of disabling the capacity to adapt. The cost-cutting of today may not look so good six months from now unless it is combined with investments that keep the capacity for change alive.