Management SummaryStern Stewart Research // Volume 61

Global competition forces companies to optimize their cost structures – even those companies that did not have to worry about price-oriented competitors in the past due to their superior technologies and outstanding product characteristics. Enterprises that combine innovativeness and product quality with low costs are becoming ever more common, causing repeating impacts on the own company and cultural change with regard to its relationship to the outside world. This in turn has the corresponding implications for the company's self perception and internal interactions. This transition is particularly difficult for companies, for which costs had previously "never been an issue", and it also comes with its share of risks.

Cost-reduction programs are often poorly designed: they take too long and are insufficiently coordinated, which paralyzes the organization; they are too tentative, so that the people within the company, who fight to retain the status quo prevail; or they depend too much on benchmarks, which reduces their internal acceptance and diverts the focus from the actual sources of potential. Temporary initiatives for a specifically targeted "Cost Out" are often a more effective way of freeing up cash, capital and resources. What matters is the way a Cost Out program is structured and executed. Five principles help make a success of a Cost Out ...



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Gerhard Nenning

Gerhard focuses on strategy development, typically followed by organizational transformation. His creative and rigorously independent thinking has impacted strategic decisions in growing as well as contracting businesses. Often going against the grain, Gerhard has devised ambitious growth strategies outside of the client's initial comfort zone. Conversely, he has helped prevent multi-billion investments which in hind-sight would have been crippling. In his capacity as the Executive Director of the Stern Stewart Institute, Gerhard shapes the Institute's agenda of dialogue with leaders in business, politics, and science.

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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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Milan Manduch

Being a psychologist at heart Milan is fascinated by the interplay of individuals and organizations. This proves to be invaluable when it comes to his focus of streamlining organizations or define measures for higher growth, incl. M&A. Being a cross-linked thinker and a traveler between nations he also understands to quickly grasp the custom corporate culture and read characters of individuals. To be physically fit for his projects, Milan spends much attention to a balanced nutrition and practices multiple sports.

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