The Only Mantra To Sustain The Job – COST CUT ??


Its 5-6 minutes read

As the impact of the COVID-19 Coronavirus pandemic spreads, most of the corporate either have started or planning to start the cost-cutting drive across their organization irrespective of its positive or negative impact as the immediate remedy to recover the financial loss to cut down on the expenses. All functional leaders are facing pressure to cut the cost.

A strategic move must rule over ad hoc urgency because the way you manage your cost decisions now will determine how well you sustain your performance during this crisis and emerge out as it passes.

“Organizations must not rule out the effect of irrational cost cut measures as short term gains that may impact their futuristic growth plans as long term measures”

Be a protective & proactive risk analyzer understanding the impact that can help you avoid taking rash or wrong decisions that could spoil key talent outcomes in the long run. Cost-cutting initiatives and de-investment can damage employee experience, which is critical for engagement and productivity. Whilst please ensure that all cost-cutting efforts are made should be transparent across the organization. Be very cautious in such an adverse time.

Now Let’s imagine that in absolute organizational pressure you need to take immediate steps to cut the cost even if you do not have enough time to think strategically, then just try to think decisively to avoid any rash decision which may mount on to your unwilling desire.

:- You may target an immediate impact of your spend i.e. eliminate or suspend those spends that have a long term impact instead include expenses payable on a short term basis or instantly to understand the real-time impact

:- Re-engineer your current process in such a way that you are able to reduce or eliminate that cost component from your cost sheet on a real-time basis instead of temporary elimination to reappear later as such actions might impact your future projections/results

:- Always have a clear focus on the operating expenses i.e. service costs as such heads would help you achieving cost saves on real-time & immediate basis that you can always show in black & white to your management. Such service costs can again be included in your cost regime as per need.

:- There should not be any uncertainty in your actions as such actions may lead to losing productivity. Whatever you do, make sure that it is based on logical facts as even if somebody wants to revisit & evaluate your actions later, it should sound logical & does not have an adverse impact on other processes or functions.

:- Re-engineer the centralized or decentralized processes that may fetch you greater savings like any centralized spend or purchase can be converted into a decentralized one as during this tough time logistics could be an issue due to which cost may get escalated. Carry out a proper CBA (cost-benefit analysis) to understand its net impact

:- Analyze & address all your mandatory & optional spend i.e. look at options that are easier to save options without hampering the business likewise deeply evaluate all your fixed & variable cost. Fixed costs remain constant irrespective of its volume, size & shape, etc so this cost is a must to rationalize cost whereas on the other hand variable costs too changes with the change in volume, requirements, etc thus it should also get changed on a need basis.

For the longer-term benefits look beyond the Covid-19 pandemic as strategic cost optimization is a must to have activity now for every organization & act decisively to sustain its impact. You need to well understand your spending & its value proposition. Establish your current spend & efficiency without which you may not be able to clear outcomes. Benchmark your spend & efficiency against your competition to identify the further scope of improvement by identifying & prioritizing opportunities.

Trust me ask yourself before any COST CUT whether a correct decision or not or you may sustain your business simply by RATIONALIZING YOUR SPEND.

To understand it in a simpler form:– You serve fresh milk tea/coffee (Beans) to your staff at the office. In an extreme situation like today, Would you simply CUT COST by stopping this service? OR would you still provide premix tea/coffee to your staff?

See everybody understands the severity of today’s scenario, so staff would rather be happy to have powder tea/coffee in place of NO tea/coffee that makes staff also happy, satisfied & convinced by your this calculative action.

I welcome your feedback/any suggestion on this write-up. Please connect with me at

Your’s Buddy,

Mr. Connect

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