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Crying about cutting costs doesn’t help

Regus CEO Mark Dixon

One problem is the language we use. We should talk about saving money, not cutting costs. If you think only about cutting, it is hard to be creative. And it is possible to be creative about saving money. More than possible, it’s essential.

November 19, 2012 3:09 by



By Mark Dixon, Group CEO and Founder of Regus

Over the past century or more, economists have come to realise that in a downturn, if you cut and cut again, your economy will simply shrink. In selective ways, you have to take risks, and spend money in order to give an economy the capacity to recover and grow.

One problem is the language we use. We should talk about saving money, not cutting costs. If you think only about cutting, it is hard to be creative. And it is possible to be creative about saving money. More than possible, it’s essential.

If you need to save money urgently, gather your senior management team together, take them away somewhere and have a no-holds-barred brainstorming session. You need ideas, and you get more of them when you have a variety of different perspectives. That’s what I do, anyway.

One thing you must do is to look at those costs that are often thought of as “fixed”. Take property, for example. If you own your property, you can sell it and lease it back to generate capital; if you rent, you can still devise a commercial plan that allows for a workable renegotiation. Regus has a number of high-profile clients who have abandoned fixed office space in favour of our flexible work spaces and found that not only do they save money on overheads; they also make productivity gains, as people make better use of their time.

Take a fresh look at your relationships with suppliers. You should be working with them as partners, looking for mutual benefit. It’s not hard to find common goals. Electronic ordering and invoicing, for instance, saves time, paper and money. But buyer and supplier have to ensure that their systems are compatible. So get to know them a bit better, keep your contracts flexible, and don’t commit to a fixed rate for a certain product or service for more than a year at a time. It will often suit you both to re-examine your terms of business in the light of market developments.

We always need to look at people. Sooner or later, most organisations in search of economies will look at headcount. It’s the wrong target. You shouldn’t be looking at headcount, but at productivity. If people are sufficiently productive – and in many cases you can calculate that an individual is a net source of profit for the company – then why would you let them go?

In order to make employees more productive, you have to take them into your confidence and be prepared to embrace new working practices. Some people could do much of their work from home or be closer to their customers – which can mean they cost less in terms of office space, not to mention their own commuting time. Use videoconferencing so you don’t have the expense of planes, trains and automobiles. Ask them how they would like to work and contribute to economies – making it their problem and not only the company’s.



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