Back in 2006, I remember getting that ah ha! look from an old friend when we bumped at Delhi airport. I was on official tour travelling on a low cost airline. He was quick to say "I mean for God's sake, you work in a Fortune 100 company bro, tell your company to grow up".....funny then I guess, not funny now.

When I look back to those novice days, I discover prudence in the frugality proposed then for comparatively better days in trying times. None can with surety claim financial fortunes, robust forecasts, trends et al. Call it a byproduct of flattened yet diverse economic world geography. What happens here, affects there, the crisis looks the same, yet at a lot of places it’s just in the mind rather than in transactions.

In such complexities, what augurs well is a sound cost management culture. Implications should be clear. For the laggards in maintaining such a culture, bad times bring alive the cost frugal mindset which is viewed as an aberration by existing members in the organizational ecosystem. It’s like asking a full grown elephant used to having a rich diet to suddenly lose appetite. To the elephant, this might be inexplicable. There is fear, anxiety and curiosity. If this is now, what's gonna happen tomorrow? There is scope for further degradation and rumors and the output is an even weaker culture. Even worse a trend in bad times, when you need your best to face.  

Contrary to the laggards, the sound cost managing culture oriented organizations will lead the way during any slowdown or recessionary trend (most do). Its not the unusual switch between a kingfisher to an indigo. It’s from smart to smarter. Its from spending smartly today to spend smarter tomorrow. The culture does not have to go through a complete makeover; instead it shows its real value through better cash reserves, manageable workforce morale, reduced expenses and comparatively better revenue and profits (or survivable losses). Cost cutting actions at this stage is an alternative for laggards, but a standard for the winners.

Cost management is effective for winners but tends to be dangerous for laggards. Its the same stuff with different implications; flat growth at one end in comparison to layoffs at the other end. Implications obviously are pan organization and in some cases to the society.  Its a lesson then, cost management culture is not just about achieving temporary financial health. Simply put its not a number we are aiming to dictate and achieve. It’s about contributing to long term growth, shareholder value and probably greater service to the community as a whole.

With a flattening world economy, cost management culture demands special attention. Economy and competency changes will keep changing the growth plateau globally and perennially. Every sub-economy will continue to experience positives and negatives. But to retain its identity, every organization warrants focus on this seldom ensconced culture....the key word is CULTURE..everything else is just a temporary catalyst.

So they say about this culture...."Neglect costs, pay for negligence; Manage costs...survive longer"  

Cheers 

Vinayendra Jain

Product Marketing Manager – Home Solutions & Intrusion

Honeywell International - ADI

PUMBA Class 2006