What Leaders Are Saying About Costs and Growth in 2024
New research from The CEO's Guide to Costs and Growth shows that executives are making cost management a priority to hedge against global uncertainty.
BCG’s integrated approach to effective cost management rapidly identifies the deep-rooted issues affecting an organization’s cost structure and implements customized, industry-specific initiatives to create organizations that are leaner, faster, and stronger.
A cost management strategy is only effective if it is transformational, lasting, and sustainable. With end-to-end budget or headcount reduction, the impact is immediate—but the benefits don’t last. Quick cuts simply do not address underlying problems, nor do they improve the longer-term health of the company. In fact, they may impact an organization’s ability to compete and serve, ultimately exacerbating the original need for bottom-line improvements.
BCG’s holistic approach to cost advantage efficiently and effectively transforms an organization’s business, taking into consideration direct costs such as labor and materials as well as overhead costs—which in turn allows for reinvestment in future growth, stability, and strategy. The result is effective cost optimization that boosts performance and margins while simultaneously unlocking total shareholder value.
Inflation, market uncertainty, and rising interest rates are all putting pressure on organizations. At the same time, organizations need to invest in talent, sustainability, and digital to remain competitive. Higher operating expenses are squeezing margins, prompting companies to look at their cost structure for answers—while continuing to fund innovation and growth. But there are many reasons beyond macroeconomic conditions for streamlining costs. Businesses that secure short-term cost optimizations can shore up long-term competitive advantages, exploring opportunities and enhancements that will be beyond the reach of others.
Unlike one-dimensional cost reduction or restructuring plans, BCG’s accelerated cost advantage approach resets costs within a strategic framework that is customized, precise, and thorough. Our total cost management process involves quickly diagnosing underlying operating issues, benchmarking performance, and then implementing short-, medium-, and long-term cost optimization initiatives and industry-specific measures to rightsize expenses.
In parallel to optimizing costs, BCG experts help clients build a foundation for future competitive differentiation and growth by: