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.
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