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Rules for BE DiFFERENT Cost Cutting

Guest post by: Roy Osing

Article Overview: Reducing operating expenses shouldn't be a draconian exercise; do it with your Strategic Game Plan in mind...

Rules for BE DiFFERENT Cost Cutting

When operating margins get squeezed, organizations go on a cost cutting rampage often without reflection on their Strategy. This approach is a disaster waiting to happen.

Here are some BE DiFFERENT Guidelines for collapsing your cost envelope without being sorry later for your actions:

- stay away from activities that impact how you serve customers. Customer serving functions and people are definitely NOT in the 'low hanging fruit' category.

- examine quick hit opportunities to simplify business processes. Cut out unnecessary steps that impair effectiveness. Less complex processes will drive expenses down.

- eliminate layers in your organization that 'manage' and do not directly contribute to the output of the organization.

- throw out low value-add positions. Any 'or' jobs such as 'co-ordinator', 'administrator', and 'facilitator' need to go. You are in survival mode and need doers not people who work with the output of others.

- cut the crap. Anything that does not directly serve the strategy of the organization should be hacked. This is essential in good times; it is critical in challenging times.

- look at temporary positions. Consider keeping only those that are in the serving customers value chain.

- Training programs that don't support the strategy (customer service, marketing and sales) directly should be postponed.

- mass media advertising should be eliminated in favor of targeted promotional programs.

Incent your leaders to remove non-strategic costs. Change the bonus compensation plan to make it matter for all of them.

Cheers,

Roy Osing

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Article Tags: cost cutting, operating expenses, strategic game plan
Referred by: http://www.starrbizz.com



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