It’s time to unlearn to either focus on growth or decrease on costs. The best value creators do both. Always.
One of the main takeaways from the @World Economic Forum, is that global disruption isn’t slowing down—it’s doing the opposite. Organisations must therefore prioritise building resilience. A responsive muscle that helps you to prepare for the unknown of tomorrow.
In the previous months, we have had many conversations with C-suite across Europe. If there’s one red line that is known among the leaders we talk to and work with, simply raising prices will not structurally solve the headwinds that lie ahead. In fact, in some segments, prices are coming down again.
However, caught in the bind of running vs. developing the business, many organisations feel they need to “choose” between either margin or growth. It’s about finding the right method. A method that allows you to improve productivity while growing your top line at a compelling price point.
Too often, organisations have a hard time articulating exactly how they create value or how their cost structure aligns with their strategy. It makes it difficult to know which operation or function deserves the next dollar of internal investment. Usually, it fails. Because most organisations just don’t get specific enough and lack execution capability. By default, they try to achieve best-in-class capabilities everywhere. As a result, they cannot achieve real cost transformation. Alternatively, they cut costs indiscriminately. It stalls value creation as a result.
We see that winning organisations focus on several operational key pillars. However, they also invest in a lost art: scenario planning. It helps to identify business areas most at risk. This can be customer service delivery or key supplier management, for example. So, make sure to envision different organisational futures and articulate your decisions based on each one.
