Sluggish GDP growth. Weak consumer spending. Persistent unemployment. Tougher competition from emerging economies. Every day, companies in mature markets struggle with these and other challenges. To succeed, they must optimize their overhead costs—but in a way that creates sustainable competitive advantage.
At a glance
- Slashing overhead across the board by a random percentage during tough times isn’t sustainable—so companies need a more sophisticated approach.
- They must pull combinations of six overhead-cost levers: immediate austerity measures, indirect procurement savings, refocused customer and product efforts, organizational restructuring, process effectiveness, and shared services.
- The best combinations of levers reflect the unique characteristics of a company’s industry and the company’s own history.
- The right combinations of levers also deliver benefits over time—not just in the short term.