Connecting the classroom to the "real world"
Cut Costs, Grow Stronger
I don’t know how I managed to never post this here, but I’m getting a new computer and found the PDF version of this article on my Desktop while I was cleaning things up for the transition. In fact, I think it was this article that first brought me to the strategy+business website, a great resource that I highly recommend.
This article focuses on cost cutting in the beginning, as evidenced by statements like this:
Dramatic cost cutting gives you a chance to refine or even reformulate your company’s overall strategy.
…but it quickly becomes a piece about strategy, capabilities, and execution as well:
On its own, for example, PepsiCo’s high-performing capability for launching new food and drink products might not amount to much. But PepsiCo also has a related capability: a world-class skill at retail outlet distribution. That capability has made PepsiCo one of the most successful food companies in the world.
There is much to be learned from this great article. We are perhaps the point where most companies are dramatically slashing costs, but knowing what to do “next time” and focusing on the strategic issues in here are still important. Keeping strategy at the center of any major decisions, such as which costs to cut, is important and because it at least gets everyone “on the same page.”
Cut Costs, Grow Stronger. To reduce expenses for the long term and lead the way to recovery, start by taking a strategic view of your capabilities. By Shumeet Banerji, Paul Leinwand, and Cesare R. Mainardi. strategy+business. September 15, 2009
