I want to share a conversation I had recently with a CEO of a fairly large company. He was telling me how they’ve done as much fat cutting, expense reduction, budget freezing and overhead trimming as they can.

They’re on their second rounds of layoffs and it’s still not looking good, as another layoff is lurking. With sales down and their pipeline drying up rapidly, I asked him what he’s doing to better market and sell his core product line, as well as what the company is doing to better train and develop their people, especially their salespeople. As I surmised, he responded, “Well, regarding advertising and training, those were two of the first things we cut out of our budget.”

He then continued by saying, “We’re doing everything we can to cut costs wherever possible, just doing the absolute minimum in spending to ride this storm out. We’re running pretty lean right now and really, the only things we’re spending money on today are the bare necessities to keep this ship afloat and to keep the lights on.” The tone in his voice almost suggested that he was proud of the way he’s handled this.

My response to him was simple. And it’s the same message I’d deliver to every CEO and business owner out there who thinks this is what they need to do to navigate through these challenging times and come out on top. I said, “You can continue to cut costs and do what you can to keep the lights on but keep this in mind. In the end, you’re still selling and managing in the dark.”

In today’s marketplace, you can’t incentivize a company through a recession, freeze enough spending or cut enough overhead to survive, let alone thrive. There are enough companies out there that have proven this already who are no longer here today and more that adhere to this philosophy as a survival strategy (Circuit City, Steve & Barry’s, Linens ‘n Things, Macy’s, Citibank, Sharper Image, Washington Mutual, Home Expo, Ebay, AT&T, KB Toys, Panasonic, IBM, Microsoft and the list goes on and on. Here’s one scorecard on CNET that lists the companies that fall victim to this line of thinking and how many people they’ve laid off to date).

There are dozens of case studies and statistics out there demonstrating that those companies who continually market, advertise and invest in the growth of their people during tougher times are the ones who eventually rise to the top and thrive, positioning themselves to win more business when things turn around. Those companies who are thriving today are the ones who have the most important question in focus and in their line of sight. What is top of mind for them is, “How can I make my salespeople even more valuable and effective?” These are the companies who are investing in advertising and more so in sales coaching, sales training and in further developing their core asset, the one that can make the greatest impact in their bottom line; their people.

CEO’s and leaders of these top corporations are more transparent than ever, and most of us don’t like what we see. In fact, the words “clueless,” “disconnected” and the phrase, “out of touch with reality” come to mind. Maybe it’s because they’ve been sitting in their ivory tower far too long or maybe it’s because they’re spending far too much time traveling in their private jets.

Sure, we can’t control many of the things going on in the economy. However, what these CEO’s and companies can do is realign their thinking around the things they can control and the importance of continually developing their people, which begins with how these executives develop themselves into the leaders they can be in this new age.

It’s evident that many organizations have lost sight of the primary objective of management and leadership, which is simply this: To make your people more valuable.

So until my next rant, learn something new, hone your skills and have a great selling week!