There seem to be a lot of “trickle down” theories bouncing around. We have trickle down in marketing that says high-end consumer goods will reach a price-point comfortable enough for the masses to afford. Can you say iPhone? Trickle-down theory in the world of technology highlights the deployment of specific technology solutions in niche vertical markets that eventually migrate to other verticals. Perhaps the best example of that in security are some of the FIPS 201 protocols filtering down to the corporate sector from government.
Yet the most familiar of them all is “trickle-down economics” that was the backbone of President Ronald Reagan’s economic philosophy. The media called it Reaganomics. More accurately described as supply-side economics, this trickle-down effect is part fact and part fiction.
The premise that tax cuts to top-income earners, along with economic stimulus to big business and rich investment bankers somehow “trickles” down to benefit the middle class has some merit in a free-market society. But as we have seen this past year, when those same investment bankers fail to let the free market do its thing, and government steps in to regulate the money faucet, bad things happen.
Will Rogers once said during the Great Depression that “money was all appropriated for the top in hopes that it would trickle down to the needy.”
But when the economy tanks so badly that the trickle dries up and corporate spending is almost non-existent, is there a cumulative effect on the enterprise? That certainly seems to be the case. Many security directors have been told to put technology projects on hold, freeze needed hiring and stretch the budget until the organizational purse strings reopen.
I recently asked several security directors if their approach to providing security and risk management had been impacted by budget cutbacks and lack of capital expenditures over the past 12 months. The majority agreed the impact was real and asked not to be identified for obvious security reasons.
“As many businesses and industries around the state close or cut back production and hours, we are affected,” the director of a major nuclear energy producer says. “The trickle-down effect has caused us to drastically cut all expenditures except for the absolute necessities of the cost of operation. Training and travel budgets have been cut to the bare bones. Internal customer-service requests are handled by phone or e-mail wherever possible to minimize the manpower demands. The security department is tasked with getting the most from every dollar we spend.”
Another security director says her actions have been just as drastic: “We were slotted to hire additional staff and those slots were eliminated. We have prioritized our services and are sticking to the ‘gotta have’ issues like regulatory compliance. We had a $500,000 renovation of our security command center in the pipeline and that project has been placed on hold. We are all hearing the same battle cry — you need to do more with less.”
So severe and unique is the current economic deep-freeze that ASIS recently conducted a survey among its CSO Roundtable and members who are practitioners with management responsibility. While CSO and security manager answers corresponded with their respective levels of varying responsibility, there was consistency when reporting restrictions on business travel and new-hire freezes. Other areas that have been impacted include reduced training budgets and postponements in technology purchases.
I also asked if these budget cuts were having an effect on the security in their particular organizations. This was a mixed bag, with some saying that workplace violence and vandalism from former employees had increased. But overall, most appeared to be coping because they had seen the downturn coming.