Resetting cost baseline to fuel growth
January 25, 2021
In brief
In brief
- Building operational resilience and improving liquidity are topping Board agendas the world over today.
- The need of the hour is to reset the cost baseline. A zero-based mindset can help achieve a 30 percent increase in operational cash.
- Businesses must build cost consciousness into their DNA by driving a zero-based mindset in how their people think and work.
- This article calls out six critical steps that can help the C-suite outpace uncertainty and operate at their leanest, most agile and optimized form.
A zero-based mindset for businesses to fuel growth and outmaneuver uncertainty
The COVID-19 pandemic continues to drive fundamental changes in consumer values, supply chains and routes-to-market. At the onset of the crisis, it was a race for survival. Industries across the board faced depleted or zeroed revenue and increased costs as they rushed to address short-term liquidity challenges.
Our survey revealed that 51 percent of industry leaders were concerned about rebounding and recovering from the pandemic. Among S&P 500 companies, 42 percent are facing a real risk of bankruptcy. And a huge 82 percent plan to execute enterprise-wide cost reduction to free up funds to invest in growth initiatives.
Businesses are taking a series of belt-tightening measures to tide through the initial crisis. As we move to the NEXT the focus needs to shift to resetting the cost baseline and leveraging the new ways of working to sustain the cost advantage. This is critical to free up the necessary resources to reinvest in growth opportunities and thrive in the NEVER NORMAL.
Download the PDF report to read the full article or listen to the audiobook below.
The pandemic provided a unique opportunity for businesses to intelligently relook at costs and reset the cost baseline for the new reality.
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