most companies treat cost management as a one-off exercise driven by the need to manage short-term profit targets, while some of these exercises do succeed in the short term because of constant pressure from senior management, hasty cost-cutting typically goes into reverse once the pressure is removed and rarely leads to sustainable changes in costs. According to this McKinsey report, one-off cost cutting changes neither long-term process nor does it influence the way internal capabilities develop around opportunities.
A better approach is to focus on building competency in cost management rather than cost reduction. Cost management programmes tend to be more longer term but also, crucially, offer more flexibility in dealing with changing business conditions, for instance, by allowing faster response times demand level shifts and better influencing their competitive drivers.
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