productivity

Does the pressure to keep ahead of the competition in terms of productivity and efficiency ever let up?

Not in our experience, unfortunately. Most management teams face a relentless challenge of finding new and better ways to get "more bang for their buck." But faced with the cyclicalities of their markets and the pain and upheaval of cost actions, they typically view productivity improvement as best achieved through short, sharp cost reductions that are carried out when times are bad. These moves seek to "share the pain" widely and are put behind the company as quickly as possible.

Our research and experience suggests, however, that the most consistently cost-productive companies are not the sporadic cost cutters, but rather those that drive productivity standards into their ongoing resource allocation disciplines. It’s not that they don’t cut back when times are tough – it’s that they don’t rely on this to deliver ongoing productivity advantage.

The best companies build the transparency and business disciplines required to understand and challenge "bad costs" across the portfolio; and to promote the consistent reallocation of resources away from bad costs and toward "good costs" that improve the customer’s experience. They view the relentless challenge of finding new and better ways to operate as their key source of funds for outinvesting and outgrowing their competition. They also view productivity as everyone’s business – they demand high standards for return on marketing investment and efficient service to customers. They do not view productivity simply as the way they configure their back office functions, their overheads or their supply chain.

We help companies optimize the allocation of people, capital and investment to find the "fuel for growth." Our approach comprises the identification of opportunities in the near term, as well as the building of capabilities and the removal of institutional barriers to deliver sustainable improvement over time. The benefits of our approach include:

• Deeper line of sight into the productivity of a company’s cost, capital and investment
• Accelerated bottom-line performance through cost and capital reductions that don’t undermine growth
• Better "bang for the buck" through optimization of the level and allocation of growth investment
• More resources to invest in growth without undermining near-term performance
• Lower cost of capital through a more productive capital structure
• A productivity discipline that relentlessly seeks the lowest-cost way of delivering the most value to customers