As we find ourselves in a consumer recession, a lot of leaders – perhaps including you – are wondering how to reduce operating costs in 2025.
I'm biased, of course, but I’m convinced strategy facilitation is one of the best tools you can use for efficiency and cost reductions without sacrificing your performance.
Perhaps I can convince you…
Strategy Facilitation: A Lever for Reducing Operating Expenses
With cost pressures ranging from energy to insurance, salaries to stuck interest rates - you’re not alone if you’re looking for ways to reduce your operating expenses.
And, quite understandably, you may be tempted to compress your planning cycle, pick a template and ask your functional leaders to come back with priorities and budget cuts.
But there might be a better way.
Because the reality is, many teams have baked-in post covid inefficiencies and still show symptoms such as leadership misalignment, functional teams working in silos and slow decision-making.
Facilitated strategy formation is where you get the leaders responsible for implementing your plan to help you put the plan together. With that level of input you tend to get alignment - and a real commitment to implementation. Which is why strategy facilitation is one of the tools to consider if you want your plan to get done without excess costs and waste.
Aligning your team around a clear plan gives your leaders the cost-out superpower of focus and helps you find even more operational efficiencies through silo-busting and decision speed.
Aligning your team around a clear plan gives your leaders the cost-out superpower of focus and helps you find even more operational efficiencies through silo-busting and decision speed.
Align Your Leaders, Cut Your Waste
Could every leader in your firm confidently list your top three strategic priorities? And if they could, do you think they'd also agree they are the right priorities?
A study in the MIT journal, helpfully titled "No one knows your strategy - not even your top leaders", found just 28% of senior managers could articulate their company priorities.
I have to say, this reflects our own experiences with client projects. When we do stakeholder research before strategy workshops, we almost always find senior leaders overestimate their team’s understanding of their organisation’s priorities.
As you know, this misalignment means teams tend to work in silos, duplicate work and waste time and effort.
Strategy facilitation is your antidote because it builds alignment, clarity and unleashes the iron fist of focus.
With your leadership aligned on priorities, your teams apply resources more efficiently and eliminate duplicated and unnecessary effort - so you get a shot at lower operating costs without sacrificing your underlying growth agenda.
With your leadership aligned on priorities, your teams apply resources more efficiently and eliminate duplicated and unnecessary effort - so you get a shot at lower operating costs without sacrificing your underlying growth agenda.
Leaders of one of our manufacturing clients identified a big cost reduction opportunity after their strategy dialogue turned to how they might be able to increase client-facing time for sales reps in the field. By aligning their sales and office admin functions, they realised they could increase face-to-face time with tier 1 clients by 30% and reduce administration work for both the sales and admin support functions.
Eureka! This bit of joined-up thinking instantly melted away some costly working-in-silo habits.
Dissolve Silos, Boost Collaboration
Silos get formed when people in functions work up and down their direct line management chain rather than collaboratively across functions. And cross-functional collaboration is how teams overcome problems most efficiently and effectively.
But exactly how do you dissolve silos and boost collaboration over functions? You guessed it - through facilitated strategy planning!
Disappearing silos is one of the things we see very often after strategy facilitation projects.
For instance, at a recent workshop, a client exec team noticed a lack of cross-functional cooperation delaying a critical IT fix. Departments working in silos wasn't through bad intent, but the functions had been escalating disagreements and decisions to their heads of department which had the double whammy of reinforcing the silos and slowing the whole project to a crawl. The solution appeared spontaneously to the group during their workshop: they formed a cross-functional team and the silo-working vanished forever (on that IT project, at least).
Still on the fence? Facilitated strategy is not only effective in practice—the theory works, too!
Researchers in Sustainability, a management journal, might have identified the reason. In "Silo-Busting: Overcoming the Greatest Threat to Organizational Performance" researchers identified five behaviours that dissolve silos:
Collaborative Operating Models,
Cross-Functional Communication,
Leadership Alignment,
Rewarding Collaboration,
Shared Values.
When you look at that list, you'll spot exactly why strategy facilitation, as a simple technique, hits the lay-down mizzere of all five silo-busting behaviours at the same time.
Get Faster Decisions, Lower Costs
Decision speed is a big success factor for firms. Slow decisions mean wasted time and resources as costly top-heavy committees start (not) making decisions - and we all know what that feels like as the meetings pile up in your diary.
Clarity and strategic alignment frees up your people to make decisions confidently – exposing your team leaders to the "risk of getting things done", as one of my colleagues puts it.
This happened with one client who accelerated pricing approvals by deciding to eliminate senior management from almost all of the tactical pricing and promotional approvals process The result was faster decisions and faster traction on market pricing.
As if that weren’t enough, the strategy facilitation process also tends to create high levels of employee engagement, reducing turnover and churn costs. But we don't have time for that or you'd be here all day.
If you’d like to improve leadership and team alignment, break up silos, speed up execution, increase employee engagement – and reduce costs – why not have a think about strategy facilitation as a tool to help you.
Could You Use Your Strategic Planning Cycle to Dial-Up Efficiency?
Fittingly, the typical facilitated strategy process itself is lean, as it eschews the expensive and lower-value parts of traditional consulting to leave you with the highest-value activity - unlocking the value directly from your own team.
The research I mentioned:
1. Donald Sull, Rebecca Homkes, and Charles Sull. No One Knows Your Strategy — Not Even Your Top Leaders. MIT Sloan Management Review, 2018.
2. de Waal, A., Weaver, M., Day, T., & van der Heijden, B. Silo-Busting: Overcoming the Greatest Threat to Organizational Performance. Sustainability, 2019.
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