Masterclass: Cost Reduction
What is it? The business cycle, which some people led us to believe had been abolished, has reappeared.
We've had the boom, and now ... well, something not so nice. So it's time to relearn a few basic principles that have gone out of fashion Keeping costs down, for example. We all know what happens when things are going well. A hiring spree. Business-class flights. Nice hotels. Celebratory meals in top restaurants. Lavish corporate sponsorship of events. The next 18 months will be different. Belts will be tightened. And most items listed above will disappear.
Where did it come from? Cost reduction is where management consultancy came in. As Chris McKenna explains in his book The World's Newest Profession (CUP, 2006), accountants rebranded themselves in the pre-war years, putting a focus on 'cost accounting', which they offered as a consultancy service. The forgotten art of 'time and motion studies' was also about the costs of doing business. …