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Making Cost-Control Permanent

Cost control is not a matter of cost cutting but of cost prevention.

What matters is not really the method. It is the realization that the cost-effectiveness of an activity depends on the way it is being structured. It depends heavily on accepting the premise that cost control is not a matter of cost cutting but of cost prevention. And costs never drift down, so cost prevention is a never-ending task. No matter how well structured the organization, its cost-effectiveness needs to be looked at again and again. No matter how carefully it controls its costs, its activities and processes need to be put on trial for their lives every few years.

This process also ensures that the entire workforce embraces and accepts cost control. It should actually see it as an opportunity and not a threat. If cost control is seen as cost cutting, the workforce will see it as a job threat and will refuse to support it. But if cost control is seen and practiced as cost prevention, then the workforce will actually see it as an opportunity, or at the very least it will support the cost control for the sake of better and more secure jobs.

ACTION POINT: Put all the activities in your organization on trial every two or three years.

Permanent Cost Control (Corpedia Online Program)

* Source: The Daily Drucker by Peter F. Drucker

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