Quarterly Earnings are reported and the results are not what the street expected or for that matter what your shareholders expected. Corporate starts making calls to all the business unit and key functional owners to start thinking about next year’s key initiatives. Without even hearing it from anyone else, you know reducing your run costs will be in the top 3 of the corporation’s key priorities.
This time it will have to be what they call “radical” or “out of the box” or input your own clever “catch phrase” for reducing the cost of operating your business.
You scramble your team and start scheduling brainstorming meetings to figure out how to cut more costs from your operations in the midst of trying to stay ahead of the competition with new products, entering new markets to capture more share and meet key customer commitments with existing products. Sound familiar?
Typical run cost strategies tend to focus on several areas: tactical across the board cuts, reducing staffing levels and implementation of continuous improvement programs to reduce operating costs. These standard initiatives are certainly a step in the right direction, but do they deliver the needed step function, sustainable cost savings and strategic value needed for companies to remain relevant in today’s global economy?
Today, more and more companies are focusing on how to cut costs, while continuing to invest in growth & Innovation. They are looking not only at their traditional methods of reducing their run costs, but are also looking at new ways to fund growth. With technology advancements and the breath of global talent available today, companies are looking at fueling innovation to stay ahead of their competition.