Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal
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Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal

Edited by Vinay Couto · John Plansky · Deniz Caglar, PwC Strategy & Inc.
John Wiley & Sons_ January 2017

Specifications

ISBN-13
9781119268536
Publisher
John Wiley & Sons_
Publication
January 2017
Format
Hardback , 288 pages
Jurisdiction
International ? Countri(es) for reference only

Details

A practical approach to business transformation

Fit for Growth* is a unique approach to business transformation that explicitly connects growth strategy with cost management and organization restructuring. Drawing on 70-plus years of strategy consulting experience and in-depth research, the experts at PwC’s Strategy & Inc. lay out a winning framework that helps CEOs and senior executives transform their organizations for sustainable, profitable growth. This approach gives structure to strategy while promoting lasting change. Examples from Strategy & Inc.’s hundreds of clients illustrate successful transformation on the ground, and illuminate how senior and middle managers are able to take ownership and even thrive during difficult periods of transition. Throughout the Fit for Growth process, the focus is on maintaining consistent high-value performance while enabling fundamental change.

Strategy & Inc. has helped major clients around the globe achieve significant and sustained results with its research-backed approach to restructuring and cost reduction. This book provides practical guidance for leveraging that expertise to make the choices that allow companies to:

  • Achieve growth while reducing costs
  • Manage transformation and transition productively
  • Create lasting competitive advantage
  • Deliver reliable, high-value performance

Sustainable success is founded on efficiency and high performance. Companies are always looking to do more with less, but their efforts often work against them in the long run. Total business transformation requires total buy-in, and it entails a series of decisions that must not be made lightly. The Fit for Growth approach provides a clear strategy and practical framework for growth-oriented change, with expert guidance on getting it right.

*Fit for Growth is a registered service mark of PwC Strategy & Inc. in the United States

Table of Contents

Preface ix


PART I Introduction and Fit for Growth Overview 1

Chapter 1 Do You Need to Cut to Grow? 3

 

  • Circuit City: The Ostrich Approach 6
  • IKEA: Elevating Cost Optimization to an Art Form 9
  • The Fit for Growth Index 12

 

Chapter 2 Becoming Fit for Growth: The Restructuring and Renewal Journey 17

 

  • Focus on Differentiating Capabilities 19
  • Align the Cost Structure 21
  • Reorganize for Growth 24
  • Enable Change and Cultural Evolution 28
  • Continuous Cost-Fitness Renewal 29

 

Chapter 3 The Leader’s Role: Aligning Costs with Strategy 31

 

  • How Do You Know When It’s Time? 32
  • The Three Core Questions Leaders Ask 34
  • What Makes the Fit for Growth Approach Different 43

 


PART II How to Cut Costs and Grow Stronger: A Manager’s Guide 45

Chapter 4 Levers of Cost Reduction: What, Where, and How 47

 

  • Setting the Objective 48
  • Identifying Differentiating Capabilities 50
  • Selecting the Cost-Reduction Levers 52
  • “What” Do We Do? Business Portfolio and Capability Choices 52
  • “Where” Do We Do It? Organization and Location 53
  • “How” and “How Well” Do We Do It? Operational Excellence 55

 

Chapter 5 Portfolio Rationalization: Decide What Business You Should Be In 57

 

  • What Is Portfolio Rationalization? 58
  • When to Use Portfolio Rationalization 62
  • How to Rationalize the Portfolio 64

 

Chapter 6 Zero-Basing: Justify What to Keep, Not What to Kill 70

 

  • What Is Zero-Basing? 70
  • A Versatile, Holistic Cost Lever 73
  • When Should You Zero-Base Your Capabilities? 76
  • How to Zero-Base Your Capabilities 76

 

Chapter 7 Aligning the Operating Model: Redefine Where Critical Work Gets Done 85

 

  • Operating Model Elements and Archetypes 86
  • When to Redesign Your Operating Model 92
  • How to Redesign Your Operating Model 93

 

Chapter 8 Outsourcing: Let External Providers Generate Value for You 103

 

  • What Is Outsourcing? 103
  • When to Outsource 107
  • The Outsourcing Process: How It Works 108

 

Chapter 9 Footprint Optimization: Rethink Your Operations and Overhead Locations 119

 

  • What Is Footprint Optimization? 119
  • When to Use Footprint Optimization 123
  • Footprint Optimization: How It Works 126

 

Chapter 10 Process Excellence: Simplify Work and Minimize Bureaucracy 133

 

  • What Is Process Excellence? 134
  • When to Use Process Excellence 139
  • A Guide to Process Excellence 140
  • Aligning Process Excellence with Other Cost Levers 146

 

Chapter 11 Spans and Layers: Flatten and Empower the Organization 149

 

  • What Is a Spans and Layers Restructuring? 149
  • When to Restructure Spans and Layers 154
  • How to Restructure Spans and Layers: Five Steps to a Leaner Organization 155

 

Chapter 12 Strategic Supply Management: Extract More Value from Your Purchases 163

 

  • What Is Strategic Supply Management? 163
  • When Should a Company Use Strategic Supply Management? 167
  • Making It Happen: A Guide to Strategic Supply Management 169

 

Chapter 13 Digitization: Make Technology a Game Changer 177

 

  • What Is Digitization? 177
  • When to Use Digitization 179
  • How to Digitize 182

 


PART III Coping with Cost Restructuring: How to Manage and Sustain the Change 189

Chapter 14 Running a Cost Transformation: Mobilizing, Scaling, and Sustaining 191

 

  • Phase 1: Diagnostic and Case for Change 193
  • Phase 2: Detailed Design 198
  • Phase 3: Execution 203

 

Chapter 15 Morale, Emotions, and Expectations: Leading during a Restructuring 208

 

  • Uncertainty and Anxiety 209
  • Phase 1: Opportunity, but for Whom? 211
  • Phase 2: Anxiety Surfaces 214
  • Phase 3: Turmoil, but also Glimmers of Something Better 216

 

Chapter 16 The Human Element: Getting People Ready, Willing, and Able to Change 224

 

  • Elements of a Culture-Led Change Management Program 226
  • Phase 1: Diagnostic and Case for Change 230
  • Phase 2: Detailed Design 233
  • Phase 3: Execution 242

 

Chapter 17 Staying Fit for Growth 246

  • Strategic Levers: Translating Strategy into Performance 247
  • Operational Levers: Executing against the Plan 251
  • Organizational Levers: Assign Accountability and Reward Cost Consciousness 253
  • Cultural Levers: Unleashing the Individual 255
  • Sense and Sustainability: Getting from Here to There 258

Notes 259

Acknowledgments 261

About the Authors 265

Index 267

About the Author

VINAY COUTO is a principal with PwC US.

JOHN PLANSKY is an executive at State Street.

DENIZ CAGLAR is a principal with PwC US.

The authors bring more than 70 years of combined strategy and business transformation consulting experience and the unrivaled industry and functional capabilities of the PwC network to solve companies' toughest problems and help them capture their greatest opportunities. Strategy& is PwC's strategy consulting business.

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