The list of challenges facing corporate leaders today is lengthy. It includes globalization, rapidly shifting market dynamics, fallout from the European debt crisis, and a potential slowdown in Asia. It is unclear how these economic trends will play out and what impact they will have on industries and countries. Companies will also be faced with unexpected turbulence, whether in the form of adverse changes in their business or the arrival of tough new competitors. All this makes it more critical than ever before for corporate leaders to closely scrutinize the cost side of their income statement.
It is typically not enough to slash costs through short-term measures such as squeezing suppliers, shuttering facilities, and reducing head count. What is required is a move away from endless rounds of cost reductions and toward true cost excellence. This effort centers on reducing costs in an intelligent and sustainable way in order to protect against another upward creep in costs in the future.