Short-term profit or long-term prosperity

David Maister asks, in a business turndown, do you respond with cost-cutting measures, such as layoffs of junior personnel, or do you reduce the profitability at the top, redirecting the efforts of your top people to long-term growth while the junior people attend to the reduced amount of immediate work? As he says,

As always, I have to stress that this is not a moral issue but one of pragmatics.

As I read through the comments on this post, I came across one that noted this was a case of

The classic fight between short-term “success” and long-term prosperity.

Suddenly I was struck by the parallels between this dilemma faced by business owners and those faced by software developers. (Continued)