Planning cost cutting

Cost is a monster. All measures should be taken in any organization to reduce this monster to size. But where you cut cost is more important than how much cost you cut. Cost cutting at wrong places could turn out to be quite costly in long run.

Following points may be kept in mind while planning a cost cutting measure:

1. The key is identifying genuine areas where cost cutting is possible without any productivity loss.
2. Look for cost optimization opportunities.
3. In a bid to cut cost, don't cut off your organization's competencies. And don't outsource your competencies
4. Cost cutting when practiced as a fad and applied to anything without much thought is a dangerous thing.
5. There has to be a concerted effort throughout the organization to cut cost.
6. Communication is vital to engage people all across your organization to help in cutting cost.
7. Avoid touching genuine costs related to management of brand and corporate image. These costs are fundamentally an investment.
8. Leaders should practise what they preach. Otherwise, it would remain another grand vision on paper. A very senior manager was found urging his people to use less paper by using their PC more and printer less. This same guy needs hardcopy of almost everything, including emails!