An efficient organization acts beyond mere cost-cutting

Efficiency is a key value driver for long-term value maximization. Economic and geopolitical challenges force organizations to question their current business practices and adapt where needed to achieve their objectives as efficiently as possible. Barely influenceable dynamics such as increased energy prices and supply chain collapses highlight the importance of saving resources and reducing costs. Establishing efficiency is a top priority for the majority of C-Suites – as doing so improves their return on investment.

The common approach of reducing costs by 10-30% across the board seldom has a long-term impact. Organizations can be seen addressing the bottom line and focusing purely on visible costs: employee cuts and hiring freezes to reduce personnel expenses, the termination of vendor contracts to reduce infrastructure expenses, and the shifting of projects to the next fiscal year to re-duce budgets. Focusing on these types of cost reductions may promise short-term improvements. However, frequent experience in our customer engagements show that long-lasting efficiencies are found when organizational adaptations go beyond low-level cost improvements.

Instead of blindly cutting costs, it is essential to begin by gaining clarity on the substantial goals you want to achieve with your efficiency initiative. True efficiency improvements will only be realized when the actual causes of the inefficiencies are found. Is that the true objective you want to achieve, and do you want to line up with other successful organizations? In that case, top-level targets will not be adequate.

Find out in this paper how you can achieve increased efficiency beyond a mere focus on cost reductions.