By: Ryan Morrissey, Peter Guarraia, Véronique Pauwels and Sudarshan Sampathkumar
Over the next 12 months, thousands of companies will launch initiatives to make their operations more efficient. They will name a leader and a steering committee, build task forces, assemble project plans, set targets—and make the initiative top priority. In more than 60% of these companies, our research suggests, they will target cost savings of at least 10%—and most of these efforts will start to deliver modest results (see Figure 1).
But the odds are, before long, the initiative will fizzle out. Senior executives will move on to other priorities, task-force members will focus more and more on their day jobs, and the energy surrounding a once-promising efficiency effort will fade. At this point, many leaders confront a universal concern: How do we create an organization that doesn’t rely on one-off initiatives to become more efficient and keep pace with the competition? How do we lock in hard-fought gains and build capabilities for continual improvement? [Read more…]
Source: Bain & Company