Management SummaryStern Stewart Research // Volume 39

Almost every company has been sent on the journey of cost saving programs at least once in its lifetime. The purpose of these initiatives may differ from short-term cash generation to increasing operational efficiency as a base for future profitable growth.

The outcome of these programs is more often than not disappointing: Expected cost savings are not realized and – even worse – sustainability of implemented initiatives and actions is often low. In reality most programs look like defensive acts of desperation rather than targeted efficiency improvements. In the past an undifferentiated motto “10% improvements are always possible” led to undifferentiated, across the board cost cutting. However, for an active management team cost saving initiatives offer the chance to unlock enormous efficiency reserves slumbering in every organization. Focusing on the powerful driver of operational performance improvements is a real chance for substantial value creation if some simple principles are followed. Sustainable results and long-term success is based on three main principles:

  1. Start from processes instead of cost centers and headcount
  2. Attack structural root causes of inefficiencies
  3. Control effects of single initiatives and actions intensively and keep up pressure until effects have materialized in the P&L and Cash Flow statement



Stern Stewart & Co. is the independent strategy boutique. With a truly entrepreneurial team of independent thinking personalities.
The center of gravity of an open universe of cutting edge know-how. Advising clients in strategy, transaction, performance and

Stefan Heppelmann

Stefan is an independent thinker and senior advisor mostly in transformation/ turnaround situations. Combining deep financial know-how as a CFA charterholder with two decades of consulting experience he often has the one inspirational idea. Discussing key themes of the executive agenda, he shows his entrepreneurial mindset with great personal involvement. Stefan is a true entrepreneur outside the office as well, managing his own agricultural venture in France and supporting Wend Puiré, an apiculture non-profit organization in Burkina Faso.

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Konstantin Wrona

Konstantin integrates a genuine interest in enhancing businesses with a goal-oriented and focused character. He plays these strengths not just when advising on group center structures, complexity reduction, process design or functional optimization. But also when driving the social business ACES in Ghana or competing in tennis and golf on an advanced level. Typically he is the one ensuring the proper methodology and bringing up the innovative ideas, which corresponds to his recent focus on improving digitalization and agility in organizations.

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Dimitri Belobokov

Dimitri advises clients across a range of manufacturing industries. Underlying his consulting work is one common theme: Bringing together process know-how and business sense to drive operational excellence at the same time as financial performance. Dimitri is an accomplished conductor of symphonic orchestras. As the founder of a trading house in post-communist Moscow, he is a non-executive director of one of the world's premier commodities traders.

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