How to introduce a cost-cutting strategy in your innovation initiative: Step 1

To introduce a cost-cutting strategy in your innovation management initiative, and ensure that your business remains relevant and able to maximise its potential under less favourable circumstances, you should take five major steps.

Get started with STEP 1: Define your strategic cost-cutting goals, which can be incorporated in your innovation agenda

In other words, you should first have a clear view of your company’s strategy and map out good and bad costs for programme intervention, at macro and micro levels, within your innovation agenda. The starting point for any strategic cost-cutting initiative is therefore a clear understanding of a company’s strategy – of where you want to go to and how you believe you can get there.

You will need to determine priority areas and find the right cost-cutting structure, given the strategy you want to pursue in the near future, but also in the mid to long term. Some cuts are fundamental and highly advantageous but more difficult to make, and imply structural change and preparation for that change physically, technically, and even mentally.

 

From strategy to specific cuts 

Having in mind your company’s vision and strategy, you can then set your programme’s specific goals. The cuts you may want to make and the ideas you may implement to meet those goals should position your organisation for growth, and can be done at both macro and micro level.

The nature of macro- and micro-level cuts

 

Innovation management platforms are particularly useful for companies to identify relevant cost-cutting or cost improvements at micro level. These tools give voice to employees from different departments and across borders. They leverage the cumulative business knowledge and allow voices and ideas to surface and reach management in an effortless and efficient way.

Nevertheless, let’s not oversimplify the subject – that’s exactly what you should avoid. Both macro- and micro-level-oriented strategies have value and they often make more sense combined.

READ MORE:
What are the good and the bad costs in your innovation agenda?

FROM THE START:
Strategic cost-cutting and improvements in the innovation corporate agenda

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

Why leaders with a clear vision connect innovation and strategic cost-cutting

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.

READ MORE:
How to map costs for your innovation path to growth

FROM THE START:
Strategic cost-cutting and improvements in the innovation corporate agenda

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

If you’re managing your company’s innovation initiative, the Beaver is for you

Opening the way for your 2018 challenges, Exago – Beaver Release enables innovation platform managers and administrators to become master builders and determine the flow of each stage of your company’s innovation endeavour.

With simplified processes and configurations, you focus time and skills on what matters: putting together an innovation programme for effective collaboration.

5 new key features for a stronger idea management process

1. Back-office use gets more efficient
Your back-office use is simplified with:
• Easy pick and broad colour palette for customisable appearance;
• Possibility to configure multiple applications in the general back-office;
• Tag management page to facilitate configurations by object type (ideas, users, etc).

2. Customisable fields in each idea form
Sometimes a general idea description in the idea form is the best option, while in other cases, the expected impact or specific metrics may also be relevant. Exago – Beaver Release lets you choose the fields in each challenge and phase of your workflow, with an idea form that is targeted and adaptable.

3. To have or not to have prizes
Though incentives bring more engagement, you may prefer other recognition mechanisms. Our new release allows you to adjust this according to programme needs, with the option to set up internal or open initiatives without offering prizes. If you do give away prizes, you can choose to always have them visible, reminding users of what they can win for taking part in your company’s challenge.

4. Switch insights on and off
Sharing insights on each topic and challenge may not make sense for your innovation initiative in a specific moment. Platform managers and administrators can now activate and deactivate this feature whenever they see fit.

5. Extra workflow flexibility
Innovation initiatives are never the same, so workflow flexibility is a must for managers. Taking it one step further, you can now adjust your workflow and add additional states for idea analysis, voting and filtering – to easily find ideas that can be implemented with lower cost and higher impact.

Do you want to have a sneak peek of the Exago – Beaver Release? Let us know what time suits you best for your freedemo@exago.com.

Ten years building the future together

In 2006, an IT visionary, an innovation hunter and an algorithm doer met for coffee and an idea came up. In November 2007, Exago was born.

Now, on our 10th anniversary, we celebrate the results of our brilliant customers and the over one million users who have taken part in building their organisation’s future.

From the thousands that have come to life, we share 10 simple yet impactful ideas to stir us all.

We challenge you to pick (at least) one!

 

Strategic cost-cutting and improvements in the innovation corporate agenda

At the end of the 20th century and in the early 21st century, CEOs were mainly focused on growth and innovation and on how these combined to deliver real results in organisations. Yet CEOs have become more pessimistic in the last decade, as world turmoil has intensified, innovation has failed to deliver the promised land and growth has become a more elusive and complex goal to reach.

Long-term stability is highly unlikely, and we all have questions and uncertainties churning in our heads, CEOs included. They are, right now, looking for answers and for ways to include their organisations in possible solutions.

Too much indecision remains

How will the European Union redefine itself and what will it mean for trading within and outside its borders? What impacts will Trump’s election have in the medium to long term, in the US, with its main partners, and also around the world? What’s next for the United Kingdom? Will Turkey still be in NATO in two years’ time? And how does all this combine with the ongoing work and technological revolution?

Political uncertainties can strongly impact the volatile financial markets, as the Euro area still recovers from the banking crisis, deals with Brexit, Catalonia’s separatist movement and with the refugees’ migration crisis. The huge Chinese economy is also expected to continue reflecting weak exports and decelerating investment and its growth has slowed to its lowest rate in 25 years (though still near 7 percent). Japan is stuck in a decades-long recession, while the US economy is highly dependent on political decisions, with outcomes difficult to foresee.

In a weak growth environment, with low investments and rising risks, companies gamble on cost-cutting to ensure that they are prepared and equipped to grow stronger, as they wait for better times to come. Yet, more and more, cost-cutting is understood as a way to drive growth, rather than as a way to survive or avoid insolvency, as we will next seen.

READ MORE:
How strategic cost-cutting helps you shift from survival to growth
Why leaders with a clear vision connect innovation and strategic cost-cutting
How to map costs for your innovation path to growth
How to introduce a cost-cutting strategy in your innovation initiative: step 1
What are the good and the bad costs in your innovation agenda?
For step 2 in cost-cutting within your innovation agenda, you will need this
Step 3: Invest more in a bottom-up approach for your innovation agenda

 

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