Cost cutting may be a reality, but there are good and bad ways to go about it.

Challenge

Traditional approaches to cost cutting - across-the-board budget cuts, slashing expense codes like travel and training, or eliminating entire groups - can damage an organization's ability to deliver anything, even the important things.

The truth is, staff cannot magically "do more with less" on command. Your organization will do less with less. The key question is, how is that "less" decided?

Traditional approaches leave it to individual managers to decide independently what will fall through the cracks. The result:

• A patchwork quilt of failures not linked to strategy

• Collapse of teamwork as one manager's highest priority becomes a team-mate's lowest

• Critical sustenance activities are cut, and productivity deteriorates

• Staff won't take on anything new, even if it's highly strategic

The bottom line: widespread ineffectiveness, and deteriorating enterprise capabilities.

How can you cut your budget without undermining your organization's ability to deliver anything well?

Solution

Instead of cutting just the inputs (expenditures), cut the outputs and then let costs fall in line.

Strategic cost cutting begins with a deliberate look at the organization's deliverables, trimming what's expected of it.

Then, the full cost of eliminated deliverables can be removed, while the few things the organization must do well remain fully funded.

Comprehensive solution....

"We were able to cut cost fairly dramatically without jeopardizing our ability to keep the enterprise running."

Matt Frymire CIO, Riverside County, CA

Other Resources

Video: Interview of Dean Meyer on strategic cost cutting (27 min)

Case Study: We've Already Got Budget Spreadsheets, Don't We?
how Sonoco Products discovered the value of a fully developed budgeting and product/service costing solution

Case Study: From Adversaries to Advocates
how budgeting and product/service costing improved relationships between IT and its clients

Monograph: Downsizing Without Destroying
how to trim what your organization does rather than destroy its ability to do anything at all

Anecdote: Troubles With Teamwork
how traditional budget processes undermine cross-boundary teamwork.

Anecdote: Axing the Budget....
how to cut expectations along with the budget

White paper: Do More With Less -- NOT!
how to solve the problem of finite resources and infinite demands....

White paper: Investment-based Budgeting

Column: Managing Expectations....

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