The Idea in Brief
You’ve been ordered to reduce your department’s costs by 10%, 20%, or 30%. How do you do it?
First, don’t expect to reach your target with a single big idea. You’ll need a combination of 10 or more actions. Second, match the kinds of opportunities you examine and implement to the degree of cost reduction required.
To get to 10%, go with incremental ideas that do not significantly disrupt your organization’s or department’s interactions with others.
To reach 20%, explore redesign ideas that reorganize activities. This often eliminates the lowest-value ones, with moderate impact on other departments.
To cut 30% or more, pursue cross-department and program-elimination ideas. But remember that they have the greatest potential to be organizationally disruptive.
You’ve been a good manager of a large department for some time now. You’ve run a tight ship. When possible, you’ve cut costs. But now an order has come down (from high enough above that you don’t have the liberty of debating its wisdom or feasibility) decreeing that you must find an additional 10%, 20%, or even 30% in administrative cost reductions, severance aside. You just don’t see how it can be done.