Strategic cost-cutting and improvements in the innovation corporate agenda

At the end of the 20th century and in the early 21st century, CEOs were mainly focused on growth and innovation and on how these combined to deliver real results in organisations. Yet CEOs have become more pessimistic in the last decade, as world turmoil has intensified, innovation has failed to deliver the promised land and growth has become a more elusive and complex goal to reach.

Long-term stability is highly unlikely, and we all have questions and uncertainties churning in our heads, CEOs included. They are, right now, looking for answers and for ways to include their organisations in possible solutions.

Too much indecision remains

How will the European Union redefine itself and what will it mean for trading within and outside its borders? What impacts will Trump’s election have in the medium to long term, in the US, with its main partners, and also around the world? What’s next for the United Kingdom? Will Turkey still be in NATO in two years’ time? And how does all this combine with the ongoing work and technological revolution?

Political uncertainties can strongly impact the volatile financial markets, as the Euro area still recovers from the banking crisis, deals with Brexit, Catalonia’s separatist movement and with the refugees’ migration crisis. The huge Chinese economy is also expected to continue reflecting weak exports and decelerating investment and its growth has slowed to its lowest rate in 25 years (though still near 7 percent). Japan is stuck in a decades-long recession, while the US economy is highly dependent on political decisions, with outcomes difficult to foresee.

In a weak growth environment, with low investments and rising risks, companies gamble on cost-cutting to ensure that they are prepared and equipped to grow stronger, as they wait for better times to come. Yet, more and more, cost-cutting is understood as a way to drive growth, rather than as a way to survive or avoid insolvency, as we will next seen.

Andreia Agostinho Dias, Sales Executive
Diana Neves de Carvalho, Exago’s CEO

You can access the full paper here


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