Summary of Building Trust While Cutting Costs

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Recommendation

Almost always, the announcement of a restructuring initiative occasions cynicism and fear among employees – with good reason. Too often, these programs backfire and leave the organization weaker than before. Even apparently successful cost-cutting programs can cause turmoil and damage employee morale. Nevertheless, a well-managed restructuring initiative offers opportunities to create a more agile, more competitive organization. Vinay Couto, Deniz Caglar and John Plansky, experts in strategic cost transformation, outline the elements of a well-led program. getAbstract recommends this article to all leaders and managers of organizations planning cost-cutting programs.

In this summary, you will learn

  • What essential elements can lead to a successful restructuring initiative,
  • Which three phases constitute transformation progress, and
  • Why leaders must enlist and empower managers during a cost-cutting program.
 

About the Authors

Vinay Couto and Deniz Caglar are leading practitioners for Strategy&, PwC’s strategy consulting group. John Plansky is executive vice president and head of State Street Global Exchange at the financial services and bank holding company State Street Corporation.

 

Summary

Restructuring initiatives bring uncertainty, turmoil and fear to an organization. Poor communication leads to insecurity which will affect people’s performance. A botched cost-cutting effort won’t lead to a trimmed, more efficient company but can result in a weaker organization. If, however, leaders provide a clear, detailed strategy to set the company on a successful course and execute that strategy effectively – with empathy and clear communication for employees – the transformation can deliver a stronger, more prosperous organization positioned for growth and success. A well-led restructuring effort comprises three phases:


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