This is Why Your Cost Reduction Program Fails

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Andrew Hone’s company blog explains why cost reduction programs often fail. 

Although cost reduction programs can deliver a powerful mix of financial, strategic, and organisational benefits, the failure rates of these types of programs are very high. A recent survey of C-Suite executives, for example, found that while 90% of businesses had attempted to implement a cost reduction program, 75% failed to meet their targets, and 44% missed them by more than half.

Drawing on some of the key insights from our new report, the Agile Cost Advantage, in this article we consider some of the main reasons why cost reduction programs are so difficult to get right.

The reasons for cost reduction program failure can be complex, and of course depend of the specific circumstances of each cost reduction program. In general though, we see a number of recurring themes behind these causes of failure.

 

Points covered in this article include:

  • Unrealistic targets
  • Cost cuts
  • Execution challenges
  • Loss of momentum

 

Read the full article,  Why do cost reduction programs fail so often? on the Zenith Strategy Associates website.