iIf you are cash strapped, you might choose to spend less money on everything. The few things that you might skimp on are:

1. Starbucks. Expensive coffee such as Starbucks is a luxury during difficult time
2. Food. Unfortunately human still need to eat. You might opt to eat cheap junk food rather than more expensive full meal
3. Holiday. It will be an luxury to have holiday overseas, or even within the country

The problem is, you can only skimp so much before your body and soul starts to breakdown. When your soul break down and weary, it will be more difficult to come out with creative idea. And when your body starts to breakdown, you get sick. You will get less productive, earn less money, and pay hefty amount of medical bill.

The same thing applies to a company. HP during Mark Hurd’s time try to save money by skimping on Research and Development. The reason is simple: The economy was bad, so saving up is the best way to ensure the company can still operate.

But, Hurd was skimping too much in Research and Development. And the company breaks. When the economy finally recover, HP has all of its creative bloods sapped off from its R&D, and left in the rubble, trying to recover in commodity instead of creative market.

Same like human body, a business will breaks if the management skimp too much.