Cost Optimization Series:
Winning Hearts and Minds in a Cost Program

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Transcript

Chris: Quite often in savings optimization programs, we see a big focus on process, on quick wins, on metrics. Overlooked is taking people on the journey and winning their hearts and minds.

Palak: There is this perception around a cost savings or cost optimization program being all about numbers, whereas in reality, it is as much about people as it is about those numbers.

Through a cost savings program, we’re basically asking people to change. Change the way they buy, how they buy, when they buy, where they buy from, or even why they buy.

And any such change can feel really emotional, even personal. So when I look at a cost savings program, I see it in these two dimensions.

There’s the mind side, which is the numbers. Quite straightforward. It’s the targets, the benchmarks, the savings percentage, all those metrics that basically build a business case.

Then on the flip-out side of that coin is the heart side, which is that empathy element.

Chris: Change is often something as humans, we naturally start to resist. For me, I think starting the journey with understanding what’s in it for the individual stakeholders; what are the pain points that they’re suffering from day in, day out?

Making it very relative in terms of what success looks like.

If we consider the ‘minds’ element, the metrics, and we focus on the ‘hearts’ for a second, it’s not necessarily the quick wins in terms of cost savings, but it may be process improvement, it may be reduced administration.

It may just be taking away some of that noise, some of the frustrations within teams or within stakeholders or suppliers, where there’s a clunkiness in the process that they’re enacting, there’s a lack of collaboration.

Quick wins don’t necessarily just have to be about numbers. It can be that it just feels different, it feels better, it looks better. And dare I say, maybe there’s some fun coming into the process. We’ve got to enjoy going to work and we’ve got to enjoy the program and the journey that we go on together.

I think the other thing we have to consider as well is that there’s a natural resistance to a cost change program because there’s a perception around job displacement and headcount reduction. And that, quite often, couldn’t be further from the truth.

Palak: It’s where you’re basically bringing your people on the journey so that they see the program not as a threat, but as an opportunity.

Chris: There’s opportunities for individual, either in capability uplift, removing some of those non-value-added opportunities, things that bog us down in our day-to-day existence.