Having defined the strategic cost-cutting goals within your innovation agenda, it needs to be run with the same board sponsorship, direction and accountability as any other critical initiative. It is important to ensure central governance, senior management agreement and employee engagement.
The centralisation of a cost-cutting initiative is vital to avoid project duplications, to benefit from synergies and to focus on clear areas of improvement.
However, the initiative should also have branches and an army dispersed across the company, mobilising directors and managers of the different areas around this innovation movement and opening minds to collect insights from every contributor. Right from the point of planning, make sure you identify the sponsors from each business area of the strategic cost-cutting and improvement programme.
People with the capacity to make decisions based on employee insights must be mobilised and should have defined timeframes to gather specific insights and execute changes aligned with your innovation agenda. In other words, the cost strategy should be promoted by the company’s leadership, sponsored by the management team and be engaging enough to capture employees’ participation.
STEP 2 is therefore about delivering cost optimisation with the support of the CEO and top managers, helping you clearly define areas of innovation and improvement from the beginning, as well as how to address each of these areas.