Cutting costs is important to most businesses. Reducing costs by $25 is often the same as increasing revenues by $100 when you take into account the cost of delivering revenues. Keeping an eye on costs is always a good business move.
Issues arise when ways of reducing costs are only concerned with saving money and there are no measures for assuring service delivery, customer satisfaction or employee satisfaction. Typically cost saving methods take these into account because the business doesn’t want to shoot itself in the foot. Where this becomes of acute interest is when a large, aggressive savings initiative is released business wide. In these situations it can be very easy to forget about the qualitative side of things because the savings target is large enough that aggressiveness is required.
In the face of these circumstances it is even more important to focus on the qualitative side of things that impact your customers. Savings initiatives are scary because by definition people know they are going to lose some of the perks they have today – no more free coffee, smaller workstations, shared seats, etc. Focusing on savings that provide no other benefits feed people’s fears because you do exactly what they are scared of. Similarly, not communicating the new benefits of a plan is the same as not providing those benefits.
Lately a lot of what I talk about comes back to communication. It’s critical to success in everything.