Written By: Joel McGinley   

Cost-cutting is not so much about how much money you can save. It is more about how much value you can create through improved efficiency and improved processes. 

Efficiency and ease of use have to be at the core of who you are, and developing programs and systems that are easy to use and easy to maintain are the primary process to deliver high value at a low cost. 

Improving efficiencies is not necessarily the same as reducing costs. Sometimes you have to invest to make your business more efficient. 

Business owners often translate lowering costs as being more efficient. We have found that this sometimes has just the opposite effect. 

When you cut costs as your only strategy to improve profitability, you will often stifle productivity gains, causing people to work harder, eventually burn out and lose any gain that you may have realized in the short term. 

Cost reduction is a by-product of productivity improvement. We have found that if you make cost reduction your focus, then you generally only have a short term gain and eventually lose value, long term, in your company. 

If you make productivity improvement your goal, then you tend to have a long term positive impact on company value. Reducing costs through more efficient operations is the only way to realize lower long term costs. 

Creating a more efficient organization is a function of investing in and committing to improving internal processes, investing in employees, and applying technology solutions to be more efficient which gives you a much better handle on controlling costs in your business. 

At TranStrategy we help people like you discover productivity improvements that will add lasting value to your business. 

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