LEADERSHIP

A challenging base case

  • Make the base case (for annual budgets and cost reviews) always a challenging one
  • Constantly push the organization to be more cost efficient � this year not next year
  • Make sure your direct reports expect that attitude, so they no longer come in with anything less aggressive

Individual accountability

  • Be absolutely clear which individual manager is 100% responsible for hitting each cost target
  • Eliminate joint or fuzzy accountabilities

Persistence

  • Make sure the organization knows that you will always persist in the drive for cost efficiencies
  • Don’t forget commitments or let targets drift � don’t be deflected with half measures

Continuous improvement

  • Establish a continuous improvement culture

Short timeframes

  • Set short-term targets for concrete progress
  • Follow up at short intervals � what progress has been made today? This week?

Feedback loops

  • Make sure there is a process for seeing quickly and clearly what progress is being made on cost targets�
  • �Involving good hard data, delivered quickly, reviewed frequently, with visibility and transparency

Strategic skepticism

  • Make your managers very nervous about proposals to invest in strategic partnerships or core competencies

Top team

  • Establish a strong CFO and finance function, the CEO’s critical right hand for cost management
  • And a proactive, hard-nosed HR function, willing to take on the key issues of people cost and staff productivity

Role models

  • You and your top managers should be good role models in personal expense habits
  • Establish fairness or equality in expense policies and behavior down through the organization
  • Create a head office environment that sends the right cost message to suppliers and employees

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