A successful cost-cutting strategy is connected to an organisation’s capacity to evolve, to innovate, and to do so as a whole. Companies can, in fact, keep innovating in ways that do not require high investments in new product research and development, and which can save substantial amounts of time and money.
This process should start internally by capturing the wisdom of each employee, but can also reach external stakeholders, harnessing their potentially powerful insights, creating communities around the company and building communication bridges with clients and suppliers.
By listening to all these voices, and collecting the diverse expertise and know-how of their workforce, organisations can avoid waste, concentrate energies and operate in a more efficient way – thus getting prepared to react and adapt to continuous change.
Losing ‘fat’, as we know, makes us more agile, and agility is key in our times.
In this sense, leaders with a clear vision tend to use cost-cutting to align costs with business strategy. ‘Strategic cost-cutting’ helps companies lower costs, focus on the aspects of the business that are controllable and free up resources to fund transformation and future growth.
Innovation management does not offer magic formulas to do this, nor to mitigate slow growth. Yet sustainable growth, by its essence, cannot exist without ongoing innovation.
In the upcoming posts, we seek to understand what a strategic cost-cutting approach is in more detail, and how it can be important for companies in our economic environment. We also highlight how an innovation culture is fundamental to implement it, and guide you through five major steps to make it work in your organisation.