More than three-quarters of companies (76 percent) cut costs to survive during the pandemic; now 90 percent of C-suite executives say they must take a whole new approach to costs in order to transform their businesses to respond to ongoing disruption while also uncovering new growth and value. This is according to a new report from Accenture, The Zero-Based Transformation: The Big Reset, based on a global survey of 2,000 C-level executives across 15 industries.
Executives acknowledge that their current and future cost transformations must be interconnected with strategic priorities and, according to the report, a vast majority of executives surveyed (92 percent) say that transformations are no longer driven solely by financial considerations, but also need to account for their impact on their company’s sustainability and purpose. Their priority is not only profitable, but responsible, growth. In addition, leaders today are looking to reset their business holistically, instead of focusing on one or two areas as in the past. Virtually all executives (96 percent) indicated that their cost transformation plans span all or most areas of their business.
According to Accenture, there are four key aspects that companies must focus on to make cost transformations succeed where past efforts have failed:
Start at zero and redesign the business for growth and resilience
Taking a zero-based approach allows companies to consider the tradeoffs necessary, look at costs holistically across the organization, and align resources with new business priorities and capabilities.
Gain forensic, real-time visibility with advanced analytics
Putting data and analytics at the core is critical to gaining the insights needed to make intelligent, fast and accurate decisions. It’s essential to invest in the right tools and technologies to leverage the power of data to continuously monitor, course correct and control as conditions change.
Bring everyone along for the journey.
One of the keys to a successful cost transformation is aligning the story from the top to minimize conflicting priorities and ensuring consistent messaging both internally and externally. In fact, nearly seven in 10 executives agree that cost transformation creates opportunities for employees to grow in their careers with new capabilities and ownership.
Make the transformation count
Cost transformation is no longer a one and done intervention. To make it a continuous activity, companies need the right governance, data and insight capabilities to manage cost transformations in a way that ensures the benefits endure.
“We are in a perfect storm with record inflation, global volatility, supply chain challenges, and labor and material shortages. To successfully navigate this storm, company leaders have realized they need to focus on resilience, create value and deliver on sustainability simultaneously. Those who fundamentally rethink their total cost base and how they operate will move beyond cutting costs to not only survive but thrive, compete and win in the future,” said Bill Theofilou, CEO & Enterprise Strategy global lead, Accenture Strategy.
About the research
Accenture Research conducted a survey of 2,000 executives across 15 industries and 12 countries to understand the decisive actions executives are taking to fuel growth and resilience of their organizations. More than a quarter of the survey respondents were Chief Executive Officers (29 percent) and the remaining sample was equally distributed across Chief Strategy Officers, Chief Financial Officer, Chief Operations Officer and Business Unit Directors. A large majority of executives (95 percent) were part of corporations of at least $1Billion in revenue.