To reduce costs, abandon your less profitable activities

Assess the "Margin per ---" and terminate rapidely the less profitable

• Products
• Customers
• Channels
• Geographies
• Senior managers
• Suppliers
• Technologies

To reduce costs, reduce your "Costs to Support"

Costs to Support. Total costs to support a doer, excluding "Costs to Supervise" and "Cost to Equip"
Doer: Operational people who really make and sell things in the business.

Costs to Support = HRM costs per doer + Costs to manage finance + Corporate costs + Costs to market

Control that your "CTSupport" decrease with the size of the business.

To reduce costs, reduce your "Costs To Supervise"

Costs to supervise. Total compensations paid to non-doers compared to total compensations paid
Non-doers: Senior and middel managers
Doers: Employees and first-line managers

Compare the CTS between your different units
Decrease your CTS
1. By middle management downsizing
2. By first-line managers self-supervision tools ( profit or responsibility center, performance pay, activity based management)

To decrease costs, first things first

Will you decrease costs ?
1. By abandoning an unprofitable activity
2. By reducing the costs of all the activities