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initiatives. The arrival of ter address changing consumer preferences and
the Covid-19 pandemic convinced the company take advantage of service operations. A B2B com-
to speed up its timelines for automating processes pany is moving its sales model away from all but
such as criteria validation and claims processing. the most necessary in-person meetings, aiming
Expedited improvements have now put the com- to benefit from an upside it discovered during the
pany on the path to reap millions in annual savings pandemic: Inside sales allows reps to cover more
starting in the first year. customers and—done the right way—is preferred
by both customers and the salesforce.
Similarly, an appliance company that shifted much
of its sales to an e-commerce model during the
pandemic is now escalating its investment in auto- Many companies are now
mation to support a threefold increase
in direct-to-consumer sales. The company is ra- building processes that lower
pidly deploying tools to enhance inventory mana- “the total cost of ownership and
gement and short-term demand sensing, among improve their ability to respond
other capabilities.
to rapid changes
Simplicity. The need for simplicity is not new, but
it is particularly relevant today, as Covid-19 forces
a new level of focus on the most important parts of Operational resilience. Operational weaknes-
the business. Snack maker ses exposed during the pandemic led 20% of
Mondelez International, for example, plans to eli- the respondents to cite resilience as a critical
minate one in every four products in its portfolio to cost theme. Companies across industries were
streamline manufacturing. The appliance company caught off guard by global supply chain disrup-
mentioned earlier has swiftly reduced its product tions, highlighting the importance of balancing
portfolio by 20%, in a radical move jointly led by its lean supply chains and operational resilience to
manufacturing and logistics teams. Simplification in weather future shocks. Many are now building
the face of necessity goes beyond product ranges processes that lower the total cost of owner-
and into business processes and organizational ship and improve their ability to respond to rapid
structure. In a well-known vicious cycle, business changes.
and product complexity begets process complexi-
ty, which in turn begets organizational complexity. Visibility and accountability. Cost and cash
In the current situation, it is not just the companies visibility was another big shortcoming that sur-
most negatively impacted by the crisis that are at- faced during the crisis—and companies were
tacking complexity. We see businesses that have forced to improve rapidly. As a result, many exe-
largely benefi ted from the crisis—from tech com- cutives cited the importance of maintaining and
panies to those selling vitamins and supplements— embedding changes made while also improving
focusing on product and business-line reduction to control, decision rights, and end-to-end visibility
unlock process and organizational complexity and to enhance cost and cash accountability. They
radically retool the cost base. are changing what information is available and
where decisions are made as they make real ac-
Simplification in the face of countability a core component of their retooled
necessity goes beyond product cost structures.
“ranges and into business
processes and organizational Where to start
structure
These five big cost-retooling themes can affect all
elements of a company’s cost base and cash po-
New ways of working. The pandemic rapidly sition. Companies should prioritize the themes into
accelerated transitions that have been a long time one to three bold, focused moves,
coming. Companies are swiftly changing their ope- picking the elements of cost and cash where re-
rating models to reflect the new realities of a post– tooling can have the biggest impact. That means,
Covid-19 world, in which telecommuting and virtual for example, that after considering the likely impact
meetings will be widely used long after the pande- of the themes on customers, competitors and the
mic ends. These companies are streamlining their company itself, leaders may choose a bold move
organizational structure, processes and talent while around new ways of working supported by auto-
embedding tools to increase flexibility. New ways mation and digitalization. They would look across
of working was a key theme to enable retooling all functions and business units—procurement,
the cost base for 37% of the executives surveyed. supply chain, sales and marketing, service and
HDFC Bank now plans to move a signifi cant num- support, and others—to find key opportunities to
ber of its non-customer-facing personnel to work retool the cost base.
from home, a shift that will help the company bet-

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