Build a winning mentality – Start a cost reduction Quick Wins programme today Posted at: May 13, 2020 Posted in: All, Recalibrating Spend Today we are facing two business certainties and one highly likely scenario. Firstly, it’s certain that the near-future business climate will continue to be tough. Secondly, although we have some inkling given recent announcements, we don’t yet know what the “next normal” business climate will look like; different sectors will be affected in different ways. Thirdly it is highly likely that organisations who don’t prepare for these tough times will struggle. There is a window of opportunity to get ahead of the curve and prepare for the “next normal” economic state which awaits us. By acting now, decisively, organisations will give themselves the best chance. The immediate focus should be cost reduction Quick Wins. Quick Wins have two key benefits. Carefully selected and mobilised Quick Wins have an immediate impact on the bottom line and more importantly, cement the mindset that a visible, meaningful cost reduction impact can be achieved quickly. They build a winning mentality and free-up cash. If the results from a programme of Quick Wins are communicated and celebrated everyone wants a piece of the action and the effort becomes self-sustaining. The best cost reduction Quick Wins have low complexity and consume low resource volume. Quick Wins will involve some measure of change across an organisation. Existing business arrangements and systems have inertia and require energy to disrupt them. The more stakeholders that are affected by the change or the more processes the changes cut across, the more complex the required change and the greater effort is required to cause disruption. JMCL recommends that clients look, in the very first instance, at their third-party costs for Quick Wins. Depending upon the sector third-party costs represent a significant element of the cost of doing business. The ideal third-party costs for Quick Wins are those which have board reach across the business, have low effort to switch and are in competitive markets. Utilities (see last week’s article on Energy Shocks) and telecoms often fit this bill along with commodity products from online catalogues where benchmarking is possible. The only caveat JMCL would apply to delivering quick wins is around expertise. Delivering a successful Quick Wins programme requires significant spend category expertise. Any organisations embarking upon such a programme should apply the correct quality of expertise to make it happen; beware, junior staff are rarely able to step up effectively. If you would like any more information on effective Quick Wins programmes and how JMCL expertise can help you with a Quick Wins programme and mobilisation of a Winning mentality around cost reductions please contact Jonny Michael, CEO of JMCL Consulting: E: j.michael@jmclconsulting.com M: +44 (0) 7831390161
