WEBVTT

1
00:00:04.130 --> 00:00:06.630
For some companies it's about survival,

2
00:00:06.630 --> 00:00:08.870
for others it's about advantage,

3
00:00:08.870 --> 00:00:12.480
but everyone should vigorously look at their cost base.

4
00:00:12.480 --> 00:00:15.200
BCG's study found that cost delivers

5
00:00:15.200 --> 00:00:18.020
35% of total shareholder returns

6
00:00:18.020 --> 00:00:20.120
during the first year of transformation,

7
00:00:20.120 --> 00:00:23.473
and even more than 50% during the first three years.

8
00:00:26.710 --> 00:00:30.640
Short term, cost transformation is about funding the journey

9
00:00:30.640 --> 00:00:32.910
with quick-to-implement actions.

10
00:00:32.910 --> 00:00:35.330
But also it's about rethinking

11
00:00:35.330 --> 00:00:39.050
where value will come from by linking revenue and cost,

12
00:00:39.050 --> 00:00:41.670
how much you need to take out and where,

13
00:00:41.670 --> 00:00:44.880
and where you need to invest to support the transformation.

14
00:00:44.880 --> 00:00:49.080
Long-term priority shift to sustaining the results

15
00:00:49.080 --> 00:00:51.380
and designing for the future.

16
00:00:51.380 --> 00:00:53.570
Tools like Zero-based Budgeting,

17
00:00:53.570 --> 00:00:55.550
built the need in transparency,

18
00:00:55.550 --> 00:00:57.730
and combined with the new ways of working

19
00:00:57.730 --> 00:01:01.450
drives the required culture change for sustained results.

20
00:01:01.450 --> 00:01:02.910
Designing for the future

21
00:01:02.910 --> 00:01:06.520
means taking a more strategic lens on costs.

22
00:01:06.520 --> 00:01:09.120
How do we gain agility and flexibility

23
00:01:09.120 --> 00:01:11.030
to support the future growth?

24
00:01:11.030 --> 00:01:12.820
And how do we build a cost structure

25
00:01:12.820 --> 00:01:15.343
that is resilient for future changes?

26
00:01:20.110 --> 00:01:22.140
Implementing cost transformation,

27
00:01:22.140 --> 00:01:24.480
companies need to avoid the temptation

28
00:01:24.480 --> 00:01:27.540
of just issuing cost targets in silos,

29
00:01:27.540 --> 00:01:30.850
but think cross-functional and centrally managed program

30
00:01:30.850 --> 00:01:33.260
to truly challenge the status quo.

31
00:01:33.260 --> 00:01:36.610
Based on our experience in hundreds of transformations

32
00:01:36.610 --> 00:01:39.633
a three phase approach needs to be orchestrated.

33
00:01:40.490 --> 00:01:42.590
First, in rapid assessment.

34
00:01:42.590 --> 00:01:46.250
It's about identifying and prioritizing cost leavers

35
00:01:46.250 --> 00:01:48.230
according to which yield the most value

36
00:01:48.230 --> 00:01:49.883
and can be implemented quickly.

37
00:01:50.950 --> 00:01:54.360
Second, it's about achieving the quick wins,

38
00:01:54.360 --> 00:01:56.880
designing and executing the pilots

39
00:01:56.880 --> 00:01:59.480
to see the tangible impact on P&L,

40
00:01:59.480 --> 00:02:01.800
but also based on these learnings

41
00:02:01.800 --> 00:02:03.853
iterating on the future solutions.

42
00:02:05.010 --> 00:02:07.780
Last, it's about scaling,

43
00:02:07.780 --> 00:02:10.070
applying the most effective cost leavers,

44
00:02:10.070 --> 00:02:13.343
to new geographies, segments, and products.