Strategic Cost Cutting
how to trim what your organization does rather than destroy its ability to do anything at all

Speech Abstract

Okay, times are tough and you've got to cut costs. But there's a good way and a bad way to do so.

The typical cross-the-board slashing of budgets or entire groups decimates an organization's ability to do anything well. Managers are forced to promise more than their resources permit them to deliver, and then they must individually decide what their groups will and won't do.

With each manager struggling to make ends meet, things fail randomly. Costs go up as managers struggle to do their jobs without the needed support from peers. Corners are cut on quality and safety. Critical investments in infrastructure and innovation are postponed. Delivery of critical projects becomes unreliable, and strategies fall apart. Soon, the entire organization finds itself unable to deliver even the most important projects and services.

Instead, cost cutting should focus on narrowing the number of things an organization does, while ensuring that it devotes the resources needed to do those fewer things well.

Cutting costs is never fun, but this session will show you a sensible, constructive way to do it without making things worse than need be. It offers practical advice in the form of four basic rules of strategic cost cutting, and the mechanics of how to implement them.

This one-day briefing will help your leadership team understand the full scope and implications of an investment-driven approach to cost cutting, and exactly what's involved in implementing it systemically.

100-word version....

50-word version....

Outline

• Definition and scope of concept: cutting spending, not driving costs elsewhere

• Why the typical approach to cost cutting destroys organizations' ability to do anything well; the harm done by simple caps on supply

• Short-term versus long-term strategies

  - Short-term: indirect costs (value)

  - Short-term: demand management (volume)

  - Long-term: ongoing processes that optimize value

• Short-term: How to implement strategic cost cutting

  - The four rules of strategic cost cutting

  - How to implement a short-term cost study and demand management

• Long-term: Processes that continually optimize value

  - Outsourcing via extended staffing

  - Judicious investments

  - Organizational structure

  - Business-based metrics

• Facilitated discussion: next steps