Other parts of this series:
In the first two parts of this series, we talked about the importance of people and culture in financial services for the success of cost reduction efforts.
Now, let’s take a look at some of the success stories from across different industries and the lessons financial services leaders can learn from them.
Accenture worked with a large company to generate more than 3,000 smart spending ideas from its employees using a digital platform for crowdsourcing. The initiative generated $1.5 in saving opportunities.
A major global food manufacturer wanted to highlight the value of personal responsibility and asked employees to act as owners while weighing each decision against the merits for all involved. The exercise proved particularly effective in helping to promote smart spending.
Another transnational company with operations in Latin America ran local workshops to support global smart spending initiatives. Employees generated savings opportunities in local marketing costs of more than 20 per cent. A mid-level manager said the teamwork was the best he had seen in more than a decade at the company and that the level of engagement and passion was much higher than he expected.
These cross-industry examples underscore three smart spending behaviours that leaders in FS need to adopt now:
- Prove a partnership. Innovation happens naturally when employees feel like partners in their company. Foster that partnership mentality by tying your FS firm’s progress directly to employee ideas.
- Create intrinsic appeal. Seek input from your teams with expertise in specific areas when designing your cost transformation initiatives. Intrinsic motivation goes a long way. Employees who want to spend wisely are much more likely to do so than employees who are issued an edict from the top.
- Democratize with digital. Leverage social, analytic and collaboration tools to effectively engage employees at all levels. Crowdsourcing allows rapid collection of employee ideas in volume. You can then assess, prioritize and impact-test quickly, resulting in near-immediate feedback.
FS leaders who know how to create the right mindset and focus on reinventing their company will be the ones surviving in the highly competitive and disruptive market full of savvy new entrants. Understanding the value sought by customers and focusing on good costs that are tailored to the customers’ needs is a key part of the smart spending mindset. Making this shift can add your FS firm to the elite upper third that lead the way with sustainable and successful cost transformation.
Many thanks to my colleagues Diana Barae, Shammak Banerjee, Patricia Feliciano and Jan Mueller who authored the recent report: Smart Spending is not Just About the Numbers.
In case you missed it, you can read my blog series from last month covering healthy cost reduction initiatives here.
To learn more, register to download the report: Piling off the Pounds in Financial Services