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