Companies that view strategic cost reduction efforts through a cultural lens can produce long-term value.
Focus on Governance and Accountability
To effectively execute these three core imperatives, companies will want to introduce a rigorous program management initiative that focuses on governance and accountability for outcomes and facilitates driver-based decision-making across each level of the enterprise.
The consumer products sector expects to experience cost pressures well into the future. Companies that tactically cut costs across the enterprise may achieve savings initially. Unfortunately, that success is often short-lived. A more strategic approach that incorporates driver-based decision-making and data analytics allows companies to be more targeted in where they invest and how they achieve value for the company.
However, companies that view strategic cost reduction efforts through a cultural lens can produce long-term value -- and more. By linking culture and strategy, companiescan free up much-needed resources to invest in growth initiatives. What’s more, it can give investors lasting confidence in the company’s ability to achieve strategic growth objectives and its vision for the future.
Gregg Clark is Americas advisory consumer products and retail leader with Ernst & Young.
