Cost cutting vs growth

In the current climate companies will naturally be looking at ways of managing their costs, and for good reason.

However, not all costs are created equal.

Some costs are incurred to enable you to provide value to your customers whilst providing differentiation from your competitors.

The problem is, many businesses treat growth strategies and cost cutting strategies as wholly separate activities led by different people with different agendas, skill sets and KPIs, with no cross-communication.

Cost cutting often slashes assets or capabilities that could potentially be catalysts to the conception, implementation, speed-to-market and ROI of growth efforts.

Instead, Organisations need to think about their costs strategically, as investments that will fuel their growth.

The trick is to continuously seek out and cut bad costs and redirect resources towards good costs that build or strengthen your differentiating capabilities.

It is also well-documented that profitable growth is often the result of finding new uses for existing assets, rather than starting with a blank slate.

A collaborative connection between cost cutting and growth efforts enables your organisation to stay lean, healthy, and ready to pursue growth with maximal profits.