Today’s environment carries some unique challenges for I&O leaders. There are shifting needs in a number of areas (e.g. enabling increased remote working). In the face of these shifts, I&O are still expected to find ways to reduce costs. One of my colleagues, Katherine Lord, has provide some creative ways to do this. These recommendations can be found in her document, “COVID-19 Response: Top 7 Cost Reduction Actions for I&O Leaders.”
For I&O leaders, there are three main categories of cost reduction. They are cost cutting, cost optimization, and value optimization. These categories should be part of a structured, programmatic approach to reduce costs. By including these categories, one can implement tactics that work even in the face of a pandemic.
This raises a simple question. Which tactics should I&O leaders take to achieve cost reduction? The truth is that it really depends. It depends on a variety of considerations. These include I&O budget, level of organizational maturity, industry vertical, current portfolio of initiatives and the degree of impact of the crisis on the overall organization. A first step is to determine which tactics are applicable. Next, I&O leaders should identify the risks as well as a timeline for execution. By considering those last two points, the tactics with optimal impact can be implemented.
The bottom line is not to be afraid to take appropriate action. Couple cost-cutting tactics with long-term digital transformation and adaptability. This can give I&O leaders a head start in leading the disruption that their organizations need to survive and thrive.
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