Strategic Essay | 2026
Pinpointing the Empty Calories
On 21 October 2010, in the Atlas hall of the Radisson in Bucharest, I was given a question rather than allowed to choose one: market share, or profitability?
It was the seventh edition of Trade Round Table. The organisers had framed the day around a sharper version of the same problem — how far will profitability be defended in an economy without growth, in a competitive environment that has turned more aggressive? Around two hundred people came, in a year when the received wisdom was that nobody had budget for conferences. The room was extended into the one next door.
Everyone else on the programme described the market. Price and perception. Consumption at home. A pocket dictionary of the crisis. The future of traditional trade. Which store formats were winning in Europe. Description was abundant that day. The decision was the part left over, and it was mine to make on stage.
Two things are worth remembering about the timing. The first is that in Romania the crisis was late. 2008 was somebody else's headline; here the ground gave way in 2010, which meant we had watched the whole film once before being made to act in it. The second is that I had been in the seat for a matter of months. I have thought since that this helped. A year earlier and I would have had more to protect.
What I argued
When food runs short, the instinct is to eat the same things in smaller portions. It feels like discipline. It is the wrong move.
What a body under strain needs is not less of the same diet but a better one. Less volume, certainly — but composed differently. The empty calories go. The actual nourishment stays, and where it can be afforded, increases. You do not get through a lean season by eating badly in moderation.
That was the shape of it. A company that responds to pressure by reducing every line in proportion is eating its old diet in smaller portions, and it will get precisely the result a person would: lighter, weaker, and no better fed. The reduction is real and the malnutrition is real, and the second one does not show up in the period that gets the credit for the first.
I want to be careful here, because the argument is easy to overstate. Sometimes total intake genuinely has to fall. Cash is cash, and there are situations where nothing but a hard reduction keeps the lights on. But even then the composition question does not disappear — it becomes more urgent, not less. The severity of a cut never tells you where to make it.
So the question was never whether to reduce. The question is whether you know which parts carry load.
And here the tell is uniform reduction. Ten percent from every line. That is not a strategy; it is a confession. A company that cuts evenly across the board is announcing that it cannot distinguish between what holds the roof up and what is merely present, so it has decided to damage everything in equal proportion and call the even-handedness a principle. Cutting is available to anyone. That is precisely what ought to make you suspicious of it as an answer.
The alternative is not to refuse. It is to select. Abandon the dead weight and the nice-to-have that has quietly stopped being useful. Keep — and where the evidence supports it, strengthen — the few factors that actually generate the position. Throw the garbage, deliberately, rather than shaving everything and hoping.
Drucker's distinction is the useful one: efficiency is doing things right, effectiveness is doing the right things. A cost programme is an efficiency machine. It will make you superb at executing activities that no longer earn their place. In a contraction, effectiveness is the scarcer discipline and the one nobody has a template for.
The part that is usually left out
There is a second argument, and it is the one that sounds contrarian until you look at the mechanism.
Buffett's formulation — be fearful when others are greedy, greedy when others are fearful — does not transfer cleanly to commercial position. Share is not a security you buy at a discount and hold while it appreciates. It is a position that charges rent, and stops being yours the moment you stop paying.
What does transfer is more specific, and better. In a downturn, what falls in price is not share itself but everything that produces it. Shelf space. Listings. Media weight. Trade terms. Talent. A competitor in retreat releases all of it at once, and releases it cheaply, because retreat is what the cost reflex looks like from the outside. You are not being contrarian for the aesthetic. You are buying the same goods at a discount, through a window that closes the moment the retreating party turns around.
That is the whole of the counter-cyclical case, and it needs a precondition stated out loud, because leaving it out is how this argument becomes irresponsible. It requires a balance sheet that can sustain it. We count the counter-cyclical winners because they are still here to be counted. The companies that invested through the downturn and ran out of cash are not available for interview. Advice that ignores whose balance sheet is underneath it is advice written for somebody else's company.
Markus Brunnermeier's distinction, which I have written about elsewhere, does real work here. Robustness is the ability to withstand. Resilience is the ability to recover. The reflexive cut is a robustness move wearing prudence as a costume: it buys the quarter and pays for it with the capacity to bounce.
Sixteen years later, the same question, harder
I put the question down in 2010 and picked it up again more recently, in a different industry, and found it heavier than I remembered.
In beer, the innovation space is narrow but the movement is quick. You can go from product A to product B inside a season. That mobility is a form of insurance: a share position surrendered can be attacked again next summer.
In consumer electronics none of that holds. The roadmap runs on an annual cycle and is decided a long way from the market it lands in. If you do not like this year's answer, you cannot have a different one before the year after next — assuming you even know what to ask for, which is its own problem. The most visible response, the one everyone reaches for in a slow market, is simply not available.
What remains available is commercial: price architecture, channel mix, distribution depth, the terms themselves. Which is inconvenient, because these are the levers that do not look like action. Nobody announces a reworked price ladder. And it is also fortunate, because these are exactly the levers a retreating competitor vacates first.
So the dilemma of 2010 is not resolved by having lived through it. It is narrower now, and it presses harder, and the room for the heroic gesture has gone.
What actually decides it
Selection presupposes sight.
You cannot keep the load-bearing factors and discard the rest unless you can see, with something better than conviction, which is which — by account, by channel, by price step, over a period long enough to distinguish a trend from a quarter. Most organisations cut uniformly not because they believe in uniformity but because the instrument that would let them choose was never built, and a downturn is a poor moment to start building it.
Which is the part I would add to what I said in that room in 2010, and the part that has occupied most of my working life since. The dilemma is not settled by courage. Courage was never in short supply in those years. It is settled, well before the lean season arrives, by knowing which part of what you consume was ever food.