Starting situation – across-the-board cuts: an effective measure, or a blunt instrument of destruction?
When it came to implementing the actual project, an international chemical company was unable to realize its maximum efficiency potential, because the organization was reluctant to make sweeping changes. Accordingly, in the past, the company had generally opted to seek and implement across-the-board savings throughout the entire organization, following the “lawnmower” principle. However, this regularly led to false incentives and fuelled the suspicion that, in addition to overlooking savings potential, this strategy was also having an unnecessarily negative impact on growth opportunities. The central challenge, therefore, was to identify the cost reduction potential quickly and efficiently, to combat skepticism within the company, and to guarantee the sustainability of savings and increased efficiency.
Project approach – targeted restructuring aimed at sustainable realization of efficiency reserves
In order to achieve a quick impact on results, an analysis of the status quo was performed to identify and prioritize efficiency potential, and this was backed up with appropriate packages of measures. The focus in particular was on the process interfaces that had previously been identified as harboring the most significant value reserves. In order to implement the restructuring program, it was crucial to ensure that the measures that had been introduced were followed up consistently. Thanks to transparent impact auditing, it was possible to ensure that the packages of measures not only were implemented, but also genuinely delivered the planned contribution to operating income.
Finding – companies should have no fear of making sweeping changes
Developing and implementing a restructuring program is a contentious issue that companies have to deal with in difficult times. In order to overcome this situation, it is crucial to proceed in a structured and target-focused manner, in order to realize the identified efficiency potential as quickly as possible. In order to achieve optimal, sustainable results through the restructuring, there must be willingness within the organization to carry out far-reaching changes. This is the only basis on which a restructuring program can be successful in the long term.
- Restructuring program designed and implemented.
- Measures for realizing efficiency potential identified and introduced.
- Results assured through impact auditing.