Cost Cutting That Makes You Stronger (2024)

Summary.

When so much in the world feels beyond our control, costs are to a large extent controllable. But cutting them to drive short-term savings is a mistake. When companies take a one-off approach to cost cutting, they often sacrifice some of their most important investments. If cost-cutting programs are implemented in haste, little (if any) debate over the strategic intent of investments takes place. To the contrary, leaders typically dole out across-the-board targets, leaving organizations weaker, imbalanced, disjointed, and in some cases desperate and without direction. In this article the authors identify five keys to ensuring that companies build an efficient, effective culture around costs that works in both good times and bad.

• Vinay Couto is a vice-chair of Strategy&, PwC’s strategy consulting business. He is a coauthor of Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal.

• Paul Leinwand is a principal at PwC U.S., a global managing director at Strategy&, and an adjunct professor at Northwestern’s Kellogg School. He is a coauthor, with Mahadeva Matt Mani, of Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future (HBR Press, 2022).

• Sundar Subramanian is a principal at PwC U.S., and leads Strategy&, PwC’s strategy consulting business. He also heads its enterprise strategy, value, and digital transformation practice.