Gone are the days when business growth investments could be made without attention to the cost structure implications.
Today, even the pilot programs need to be designed and structured with an eye towards the cost impacts of marketplace success. More importantly, command of your cost structure, and the ability to gain scale as you grow is imperative. No competitor can pretend that operating productivity is not a prerequisite to success.
Making operating productivity a management priority requires a granular understanding of your cost structure. You need a command of how customer behavior and transaction volumes drive costs, both at the margin and in aggregate.
How you organize, allocate, and engineer your processes and resources also translates into how ultimately scalable your business is. The dynamics of fixed versus variable costs, and the opportunities to drive down both, become critical for management to master.
Benchmarking your cost performance by function
Implementing detailed cost modeling and staffing management systems
Assessing fixed versus variable cost performance, and understanding the opportunities for scale
Identifying productivity improvement and cost reduction opportunities
Assessing customer experience improvements for cost reduction opportunities
Working with management teams to develop and implement cost reduction moves
Successful management teams must learn how to simultaneously pursue initiatives on both fronts.
Reflecting the criticality of successfully managing costs, managing operating productivity is a key element of Mercatus’ perspective on the retail financial services marketplace.
We know how to make the decisions that translate into a clear set of priorities.
