Strategic cost-cutting is not dead, and we are here to prove it

Leaders with a clear vision tend to use cost-cutting and improvement to align costs with business strategy. The trend gained ground in the last decade, as world turmoil intensified and growth became a more elusive and complex goal to reach.

With low investments and rising risks, companies gamble on cost-cutting and improvement to ensure that they are prepared and equipped to grow stronger, as they wait for better times to come. In its 2013 third biennial cost survey, ‘Save to grow. Cost-improvement practices and trends in the Fortune 1000’, Deloitte underlined that cost-cutting was seen more and more as a ‘way to drive growth, rather than as way to survive or avoid insolvency’.

However, aggressive cost-cutting tactics under pressure will not salvage companies. The change has to go deeper, reaching a strategic level. This means that a company’s most valuable assets, people and their talents, must be mobilised, ‘consistent with a growth mindset, since having qualified workers and deploying them effectively is key to successful growth’, writes Deloitte.

In their recent paper, Exago’s CEO Diana Carvalho and our Sales Executive Andreia Dias show how a successful cost-cutting strategy is connected to the organisation’s capacity to evolve, to innovate, and to do it as whole. They explain how this process should start internally by capturing the wisdom of each employee, but how it can also reach external stakeholders, harnessing their potentially powerful insights, creating communities around the company and building communication bridges with clients and suppliers.

A successful cost-cutting and improvement strategy indeed helps companies lower costs, focus on the aspects of the business that are controllable and free up resources to fund transformation and future growth. And sustainable growth, by its essence, cannot exist without ongoing innovation. To make it work in your organisation, Andreia and Diana guide you through five major steps.

Feel free to reach us for the full paper at info@exago.com.

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