Many executive leaders will need to make trade-offs in their spending to tackle today’s triple-squeeze of persistent inflation, supply chain disruptions and a tight labor market. But common missteps in cost reduction can undermine even structured programs designed to optimize cost decisions strategically.
Many more CFOs will start to look for cost reductions if high inflation persists or if there is a risk that higher interest rates will weaken the demand side of the economy. Executives should scope now where to secure cost reductions while avoiding seven common mistakes that make it difficult, and potentially impossible, to pursue growth ambitions in the longer term.