Identifying the immediate potential for savings is the (relatively) easy part. Delivering them successfully and sustainably will be a different matter. As leaders start to implement changes, it will be vital to tackle the organisational and behavioural elements of cost management and efficiency so that it is instilled into every day activity.
Organisations need to become cost-conscious – full of ‘waste watchers’ – where everyone challenges existing ways of working to pursue extra value. Without such a culture, initiatives will take too long to implement and will end up returning too small an overall saving.
In our view there are four pillars that support a cost-conscious culture:
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Decentralise accountability for, and visibility of, budget management so managers across the organisation take ownership of their costs and don’t ‘leave it to the finance team’
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Incorporate cost-management into the decision making processes and establish controls within management processes and systems
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Link cost-conscious behaviours to performance management and personal objectives, with shared rewards for outcomes
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Communicate cost and value imperatives throughout the organisation, with leaders setting the right ’tone from the top.'
For many public sector managers the next years represent an untrodden road in managing cost. Those who explicitly tackle behavioural and organisational barriers have a golden opportunity to create truly cost-conscious public bodies which will more successfully implement current savings targets and uncover further opportunities to improve. In this way they will meet the ongoing pressure to deliver efficient and quality services to the public. Failure to do so may lead to further budget cuts and reduced public services.
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