In my CFO Network Group recently there was a great discussion that gave so many useful ideas and insights about cutting costs.
Reducing costs? Why is there hesitation to make a change when it impacts the bottom line?
Here is my two bob’s worth:
Reducing costs is one thing which may just mean tightening the belt or asking a supplier to reduce. That is called “running the business, which should always include knowing the potential value of low hanging fruit”.
Change is another thing that is more difficult to make even though change itself is a constant in the day-to-day world of business that must be handled. So combining the two in a continuous improvement culture with transparent feedback support and operational measures in place can let everyone work out how to keep up as a way of life. A great business axiom too is “Plan=Success No Plan=failure”. So making cost cuts does need some thought.
With suppliers and customers included that can take care of a lot of issues and your business will grow organically and often at pace. Efficiency cost reductions too fall into in balance so risk issues and relationships don’t burn you later on.
Making step change for all the same reasons as many people have stated, is actually much more difficult without taking a step. And that takes commitment, resources and often a catalyst to bring it about.
When integrating businesses cultures and/or changing software platforms to re-focus business processes, you will most often see strategic growth as the aim. Then culling redundant processes will also deliver cost reductions as one of the benefits.