Step 5: Be resilient to create a cost-conscious culture in your innovation agenda

If you are introducing cost-cutting in your innovation agenda, your ultimate drive is to create a cost culture that sustains itself over time and is not forgotten three months after being announced by the leadership.

Your final goal is that your workforce feels that the organisation’s investments are personal investments, which can benefit all.

Still, organisations are living creatures in changing contexts. So, strategic cost-reduction priorities should be regularly reviewed and updated in the same way as business opportunities are.

And so we find ourselves where we started: needing to map out intervention areas at micro and macro level, both good and bad costs, and clearly define and (re)align everyone with your cost strategy over time. Ensure that you have the best methods in place to address each area in an efficient way, using top-down yet privileging bottom-up approaches in your innovation agenda.

For bottom-up approaches, also review the communication plan at hand to help your employees understand the tweaks and turns. Let them have an active role in the process of building the company’s future together.

It will take time and some effort, since resistance is normal under less favourable circumstances. It will take people’s commitment.

Yet, with strong leadership, a clear and well-defined strategic cost-cutting programme and the awareness of shared responsibilities, an organisation can reinvent itself and learn how to do so continuously, as models are challenged and new opportunities arise.

 

Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

Access the Five-step Guide to make cost-cutting work within your innovation initiative here

Step 4: Overcoming fears over cost-cutting within your innovation agenda

Typically, cost-cutting is an expression that frightens employees. It often suggests salary reductions, job cuts and increased individual workload. When introduced in your innovation agenda, you should thus ensure that both real needs and strategy are understood across the organisation, consistently framing any cost-cutting goals.

It is important that the community clearly understands that a strategic cost-cutting and improvement strategy can assume an innovative role in the company.

It should also be understood that it doesn’t strictly relate to cost reduction for specific areas but it can, instead, help you collectively find and assess new and more effective ways of developing a process or product at a lower cost, cutting redundancies and waste.

The Communication and Marketing departments should be involved in the programme from the beginning to present a comprehensive plan capable of reaching the entire workforce. Your goal is to inform employees, help them understand what is being done and why, and create empathy with the common challenge faced.

Aligning employees with the companies’ goals will contribute to aligning costs with strategy. Remember that everyone in a company can play an essential role in identifying ‘bad’ and ‘good’ company costs, mostly at the micro level. Besides the innovation management platform, brainstorming sessions with employees and among teams can also be very useful to categorise the existing costs and to collect insights on future good costs and potential investments needed.

This continuous engagement of your workforce will also make your employees more cost-conscious, imposing a more effective cost and spending culture.

Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

Access the Five-step Guide to make cost-cutting work within your innovation initiative here

 

How Human Resource leaders make the most of innovation management

With innovation management capturing rising interest from human resource managers and directors, Exago’s team took part in the Expo’RH2018 in Estoril, Portugal, to discuss the latest news and trends in the sector. The event organised by the International Faculty for Executives gathered hundreds of HR directors from leading companies such as Nestlé, Ageas, Pfizer, Renova and McDonald’s, under the motto “Experience is the way”, on March 14 and 15.

In the spotlight was the importance of communication for employee engagement. Effective communication not only has to be continuous, but also two-sided, said Maria do Rosário Vilhena, Human Resource Director of Nestlé Portugal. The food and drink company is using focus groups to launch internal challenges and collect insights, while searching for better ways to convey “consistent messages to everyone” across the different business units of their large organisation, “and to be understood by all”.

Ongoing communication and a close relationship with employees has also been part of Renova’s success, explained their HR Director, Paulo Santos. The family-run paper consumption goods company expanded internationally as “the sexiest paper on Earth” and is a renowned case study for incremental innovation.

To open communication channels and bring together the experience and know-how of all employees, larger, multinational companies are also using platforms that allow them to reach their people across business units and geographical locations.

Promoting change through your innovation programme
Internal communication is critical in processes of organisational change, according to Paulo Teixeira, Pfizer Portugal Country Manager. The pharmaceuticals company opened a communication channel with employees through a post box placed in each business location to get ideas and suggestions, but also their feedback. Similarly, an internal tool has supported the recent image and culture change at Montepio bank, Fátima Silva, Head of Talent & Development at Montepio bank, told the audience.

To strategically realign its workforce, the insurance company Ageas used Ding!, built on Exago innovation management software. After Ageas bought AXA’s Portuguese operations, Ding! is helping the company spread its organisational culture and communicate with all the employees from the different brands they now operate, Portugal Human Resource Director Rita Baptista said.

“Listening to our employees was the most important factor for this successful transition, since we were able to make people feel part of that change,” she added. The Ageas management was able to promote company goals and engage people in the process of transformation, bringing everyone together in a collaborative innovation platform.

The HR Director of ANA – Aeroportos de Portugal, Catarina Horta, also highlighted the importance of a company’s collective intelligence as a learning tool.

Keeping in mind the words of Ray Kroc
The quote “None of us is as good as all of us” is attributed to the founder of McDonald’s and defines the company’s DNA, says Sofia Mendonça, HR Director of McDonald’s Portugal. She explains how collaborators, franchisees and suppliers are the corporate pillars involved in the business evolution. The iconic 50-year-old Big Mac, for example, is a by-product of this approach: it was originally suggested by a Pittsburgh franchisee after several construction workers commented that the hamburgers were too small.

McDonald’s connects with those three pillars through several types of channels, both face to face and digital. Gamification and social features, along with a vivid communication tone, are particularly relevant in the digital linking to their workforce, whose average age is between 19 and 23.

Make every idea count for your business this year

Are you truly committed to finding the best ideas to grow your business in 2018?

You’re not the only one.

 

Learn how Exago innovation management software can make every idea count for your company with your freedemo@exago.com.

 

 

For step 2 in cost-cutting within your innovation agenda, you will need this

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.

Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

You can access the full paper here