Why your idea management programme is so helpful for strategic cost-cutting

As business models are being challenged, organisations need to be more adaptable and resilient, naturally also by becoming more efficient and cutting inadequate costs. This change must happen from the bottom up, with the right leadership and sponsorship, to define the areas of improvement clearly and separate the good costs from the bad at both micro and macro levels. Innovation managers can, and should, lend a hand to address this shared challenge.

A well-structured innovation management programme for strategic cost-cutting and improvement is useful to get employees identifying ground-level enhancements, with several additional advantages:

Involving employees and challenging the organisation’s cost and waste culture will help you develop a cost-conscious culture for a more sustainable business approach. Keep cost optimisation as a strategic priority, even when there is no immediate pressure on costs;

Having your cost-cutting and improvement strategy embedded in your innovation management programme will bring you continuous results, building a sustainable process and putting more robust and flexible foundations in place before introducing transformational initiatives.

Engaging and empowering everyone in the organisation, from shop floor to top management, will expose inefficiencies that would not usually be identified in a typical consulting diagnosis project. Your employees know more about your everyday business than anyone else, so tapping into their knowledge and efficiently getting everyone involved in signalling cost improvements will deliver interesting results for your strategy;

With effective and transparent communication regarding cost cuts and improvements, companies can face less resistance from employees and more easily ensure business management support. It can also bring higher employee engagement, as more frequent interactions are needed between finance and the operating managers and between managers and teams to keep costs aligned with business and to track results.

Strategic cost-cutting is, however, never blind cutting. It is in fact a method to accelerate the discovery of new and more effective ways of doing business, at a lower cost, which is even more relevant in difficult times. On the whole, it should be seen as a way of questioning how we do things – even why we do them – , exploring new innovative routes and building the foundations of tomorrow’s growth.


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

Get to know the Five Steps to Introduce Cost-cutting in your Innovation Agenda here

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.

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

You can access the full paper here