Index

A

• Active Management (operating model 3)
• alignment, of operating model. See operating model
• Align the Cost Structure (pillar 2)
  • overview
  • for restructuring and renewal journey
• Amazon
• analysis
  • analytical tools for process excellence
  • business analytics and digitization
  • Challenge the What, How, and How Well (leadership principle 6)
• Apple
• archetypes of operating model
  • Active Management (model 3)
  • business units
  • corporate core
  • Holding Company (model 1)
  • linkages for operating model structure
  • operating model framework
  • Operationally Involved (model 4)
  • shared services organization
  • Strategy and Oversight (model 2)
• associated costs, portfolio rationalization and
• authentic informal leaders (AILs)

B

• Balance Cost Cuts with Capabilities Investments (leadership principle 7)
• behavior
  • critical few behaviors for change management
  • culture impacts and
  • driving new behaviors for change management
  • unleashing the individual
• benchmarking
• Best Buy
• budget process. See zero-basing
• business units, of operating model

C

• capabilities
  • Balance Cost Cuts with Capabilities Investments (leadership principle 7)
  • capabilities system, defined
  • categories of (See “lights-on” costs ; “table-stakes” costs )
  • defined
  • differentiating
  • focusing on (See Focus on Differentiating Capabilities (pillar 1) )
  • identifying differentiating capabilities
• case for change
  • developing
  • reinforcing
  • See also Diagnostic and Case for Change (cost transformation phase 1)
• category complexity
• center of excellence (CoE)
• challenge sessions, for zero-basing process
• Challenge the What, How, and How Well (leadership principle 6)
  • business portfolio and capability choices (“what” do we do)
  • operational excellence (“how” and “how well” do we do it)
  • organization and location (“where” do we do it)
  • overview
• change management
  • for Detailed Design (phase 2)
  • for Diagnostic and Case for Change (phase 1)
  • elements of culture-led program of
  • enabling change
  • for Execution (phase 3)
  • initiating change (See leadership )
  • Make the Case for Change (leadership principle 1)
  • overview
  • programmatic approach to change (See also cost transformation )
• Circuit City
• Collins, Jim
• communication
  • for change management
  • Communicate Before, During, and After (leadership principle 9)
  • communications and engagement plan, (See also Detailed Design (cost transformation phase 2) )
  • delivering, for execution of transformation
  • designing communication for outsourcing
  • developing core message platform
  • between managers and employees during restructuring
  • for outsourcing process
  • See also leadership ; leadership, during restructuring
• competitiveness
  • identifying starting point for Fit for Growth
  • “right to win”
• complexity, relationship to value. See portfolio rationalization
• conglomerate discount
• continuous improvement (CI) capability
• contracts, for outsourcing
• core questions for leaders
  • achieving cost fitness while enabling growth
  • energizing organization for transformation
  • managing and sustaining transformation
  • overview
  • See also leadership
• corporate core, of operating model
• cost management
  • Balance Cost Cuts with Capabilities Investments (leadership principle 7)
  • cost optimization for
  • costs, defining
  • 80/20 percent transformation
  • Fit for Growth Index for
  • “ostrich approach” to
  • overview
  • See also cost reduction levers
• cost of goods sold (COGS)
• cost reduction levers
  • business portfolio and capability choices (“what” do we do)
  • identifying differentiating capabilities
  • operational excellence (“how” and “how well” do we do it)
  • organization and location (“where” do we do it)
  • overview
  • process excellence for
  • selecting levers for
  • setting objectives
  • zero-basing
  • See also digitization ; footprint optimization ; operating model ; outsourcing ; portfolio rationalization ; process excellence ; spans and layers ; strategic supply management ; zero-basing
• cost structure, aligning. See Align the Cost Structure (pillar 2)
• cost transformation
  • avoiding pitfalls of
  • best practices
  • Detailed Design (phase 2)
  • Diagnostic and Case for Change (phase 1)
  • elements of, summarized
  • Execution (phase 3)
  • needs of
  • phases of, overview
  • programmatic approach to
  • transformation team evolution through phases
• credibility
• cross-functional process owners, assigning
• culture. See organizational culture
• customer experience
  • cost management and
  • cost structure and support for clients
  • customer and channel complexity
  • customer proximity and footprint optimization
  • customer segmentation
  • digitization used for
  • process excellence for

D

• decision rights
• Declare “New Day” and Grant Amnesty for Past (leadership principle 3)
• deflationary economic environment, contending with
• delivery macro process. See process excellence
• Detailed Design (cost transformation phase 2)
  • change management for
  • leadership during
  • overview
  • transformation team for
  • working process of
• Diagnostic and Case for Change (cost transformation phase 1)
  • change management for
  • governance for
  • leadership during
  • overview
  • purpose of
  • transformation team for
  • working process of
  • See also cost transformation
• digitization
  • avoiding pitfalls
  • best practices
  • case study
  • defined
  • how to digitize
  • levers of cost reduction
  • myths about
  • process excellence aligned with
  • process excellence and
  • stages of
  • when to use digitization
• direct spend
  • defined
  • validating expenses
  • See also strategic supply management
• discretionary spending
• down-select suppliers

E

• e-commerce
• 80/20 percent transformation
• employees
  • cost management by
  • digitization benefits and
  • digitization “SWAT team”
  • enlisting employees to drive process improvements, (See also process excellence )
  • establishing transformation team
  • full-time-equivalent employees (FTEs)
  • impact assessment of
  • managing vendors for outsourcing
  • planning for team dissolution
  • talent as building block of organizational DNA
  • training
  • uncertainty of, during restructuring
  • wages and footprint optimization
• Execution (cost transformation phase 3)
  • change management for
  • governance
  • leadership during
  • overview
  • sustainability of plan
  • transformation team for
  • working process of
• execution managers, appointing
• executive steering committee
  • for cost transformation phases
  • “T-shaped” steering team meeting structure
• external service providers. See outsourcing

F

• fishbone (root cause) analysis
• Fit for Growth approach
  • cost management for
  • differences (from other approaches)
  • fit, defined
  • leadership
  • pillars of, overview
  • restructuring and renewal journey of
  • See also change management ; cost reduction levers ; cost transformation ; operating model ; restructuring and renewal journey
• Fit for Growth Index
  • calculating
  • for cost management
  • total shareholder return (TSR) measurement
• “fit for purpose” approach
• flattening of organization. See spans and layers
• Focus on Differentiating Capabilities (pillar 1)
  • overview
  • for restructuring and renewal journey
• footprint optimization
  • avoiding pitfalls of
  • best practices
  • case studies
  • defined
  • as lever of cost reduction
  • “network” archetypes and
  • process
  • when to use footprint optimization
• frugality, modeling
• full-time-equivalent employees (FTEs)

G

• General Electric
• geography complexity
• global in-house centers (GICs)
• goals
  • achieving
  • clarity of
  • Declare “New Day” and Grant Amnesty for Past (leadership principle 3)
  • objectives
• “good” costs, “bad” costs versus
• Good to Great (Collins)
• governance
  • for cost transformation phases
  • effectiveness of

H

• Holding Company (operating model 1)
• hub and spoke “network” archetype

I

• IBM
• IKEA
• indirect spend
  • defined
  • validating expenses
  • See also strategic supply management
• individual contributors
• information flows
• infrastructure, footprint optimization
• internal processes, digitization for
• involuntary separation, managing

J

• Jobs, Steve

K

• Kamprad, Ingvar
• Keep the Weight Off (leadership principle 10)

L

• layers
  • defined
  • reducing
  • See also spans and layers
• layoffs. See leadership, during restructuring
• leadership
  • achieving cost fitness while enabling growth
  • aligning, for change management
  • authentic informal leaders (AILs)
  • differentiation
  • energizing organization for transformation
  • managing and sustaining transformation
  • modeling frugality for
  • overview
  • starting Fit for Growth journey
  • See also leadership, during restructuring ; principles for leadership
• leadership, during restructuring
  • addressing uncertainty and anxiety
  • for Detailed Design (phase 2)
  • for Diagnostic and Case for Change (phase 1)
  • for Execution (phase 3)
  • morale and expectations in each transition phase
  • need for
  • upside of transformation for midlevel managers
  • See also change management
• Lean approach, process excellence and
• legacy programs
• level, in organizations
• “lights-on” costs
  • defined
  • identifying lights-on activities
  • zero-basing
• local for local “network” archetype
• low-cost countries (LCCs)
• low-cost manufacturing “network” archetype

M

• Make the Case for Change (leadership principle 1)
• management processes
  • as building block of organizational DNA
  • management hierarchy
  • See also midlevel management ; senior management
• managers, defined
• midlevel management
  • engaging, for change management
  • management hierarchy
  • upside of a transformation for
  • See also leadership ; leadership, during restructuring ; spans and layers
• modeling, of frugal behavior
• morale. See leadership, during restructuring
• motivators
  • motivating performance over politics
  • for organizational efficiency
  • “pride builders”
  • rewards for cost consciousness
• MTU Aero Engines

N

• natural language processing
• nonlabor costs. See strategic supply management

O

• objectives
  • for cost reduction levers
  • setting
  • simplistic targets as problem
  • See also goals
• offshoring
• operating model
  • aligning, overview
  • avoiding pitfalls
  • best practices
  • case study
  • elements and archetypes of, (See also archetypes of operating model )
  • how to redesign, (See also redesign process for operating model )
  • as lever of cost reduction
  • process excellence for rebalancing
  • restructuring and renewal journey for
  • when to redesign
• operations
  • executing against the plan
  • Operationally Involved (operating model 4)
• organizational architecture, developing. See also redesign process for operating model
• organizational charts. See spans and layers
• organizational culture
  • assessment of
  • change management elements
  • change management issues of
  • cultural levers (unleashing the individual)
  • culture impacts and critical behaviors
  • enabling cultural evolution
  • Keep the Weight Off (leadership principle 10)
  • See also change management
• organizational levers
  • assigning accountability and rewarding cost consciousness
  • operational excellence as cost reduction lever
  • organization and location as cost reduction levers
• “ostrich approach”
• outsourcing
  • avoiding pitfalls
  • best practices
  • case study
  • defined
  • as lever of cost reduction
  • myths about
  • offshoring compared to
  • process of
  • value creation with
  • when to outsource

P

• performance, translating strategy into
• P&G
• player-coaches
• portfolio rationalization
  • balancing revenue and complexity costs to maximize value
  • best practices
  • business portfolio and capability choices
  • case studies
  • conglomerate discount
  • myths about
  • portfolio complexity, defined
  • portfolio complexity, understanding
  • taking out associated costs
  • trade-offs, managing
  • trade-offs between complexity and value
  • when to use portfolio rationalization
• “pride builders”
• principles for leadership
  • Align the Top (principle 2)
  • Balance Cost Cuts with Capabilities Investments (principle 7)
  • Challenge the What, How, and How Well (principle 6)
  • Communicate Before, During, and After (principle 9)
  • Declare “New Day” and Grant Amnesty for Past (principle 3)
  • Keep the Weight Off (principle 10)
  • levers to drive sustainability of
  • Make the Case for Change (principle 1)
  • overview
  • Put Everything on the Table (principle 5)
  • Set Up a Parallel Organization to Change the Business (principle 8)
  • Showcase Quick Wins (principle 4)
• process excellence
  • advancing transformation goals with
  • aligning with other cost levers
  • analytical tools for
  • avoiding pitfalls of
  • best practices
  • case study
  • defined
  • “fit for purpose” approach
  • guide to
  • levels of processes
  • myths about
  • for operational challenges
  • overview
  • rebalancing operating model with
  • when to use process excellence
• product complexity
• program lead, for transformation team
• program management office (PMO)
  • for cost transformation
  • Set Up a Parallel Organization to Change the Business (leadership principle 8)
• programmatic approach, to change. See also cost transformation
• Progressive
• Put Everything on the Table (leadership principle 5)
• PwC

R

• readiness, for change. See change management
• redesign process for operating model
  • building implementation road map (Step 4)
  • case study
  • developing organizational architecture (Step 3)
  • framing options to accelerate value creation (Step 2)
  • how to design operating model
  • recognizing need for
  • understanding value creation levers (Step 1)
• Reorganize for Growth (pillar 3)
  • overview
  • for restructuring and renewal journey
• request for proposals (RFPs)
• restructuring and renewal journey
  • Align the Cost Structure (pillar 2) for
  • for continuous cost-fitness renewal
  • in deflationary economy
  • enabling change and cultural evolution for
  • Focus on Differentiating Capabilities (pillar 1) for
  • identity of a Fit for Growth company
  • overview
  • Reorganize for Growth (pillar 3) for
• rewards
  • for cost consciousness
  • Showcase Quick Wins (leadership principle 4)
• “right to win”
• roles, clarifying

S

• sales, general, and administrative (SG&A) costs
  • case study
  • footprint optimization
  • for outsourcing
  • spans and layers
• segmentation analysis
  • employee impact assessment
  • overview
  • stakeholder engagement and
  • for zero-basing process
• senior management
  • Align the Top (leadership principle 2)
  • empowerment of
  • engaging, for change management
  • executive steering committee for cost transformation
  • management hierarchy
  • spans and layers redesign involvement
  • talent as building block of organizational DNA
  • See also management processes
• “sense and adjust” planning process
• separation, during restructuring
• Set Up a Parallel Organization to Change the Business (leadership principle 8)
• seven-waste assessment
• shared services organization, of operating model
• Showcase Quick Wins (leadership principle 4)
• Siri (Apple)
• site performance check
• “smart factory” systems
• sourcing strategy, developing
• Southwest Airlines
• spans and layers
  • avoiding pitfalls of
  • benefits of efficiency in
  • best practices
  • case study
  • definitions
  • how to restructure spans and layers
  • as lever of cost reduction
  • myths about
  • span of control, defined
  • spans of control for management, variations
  • when to restructure spans and layers
• spend
  • defined
  • direct spend
  • indirect spend
  • typical savings by category
  • See also strategic supply management
• stakeholders, engaging
• starting point, for Fit for Growth approach
• steering committee. See executive steering committee
• strategic levers (translating strategy into performance)
• strategic supply management
  • avoiding pitfalls of
  • best practices
  • case study
  • control of direct and indirect categories
  • defined
  • guide to
  • maturity framework of
  • myths about
  • spend, defined
  • when to use strategic supply management
• Strategy and Oversight (operating model 2)
• structure, organizational DNA and
• subject-matter experts, for transformation
• supply management, strategic
• sustainability
  • for achieving goals
  • cultural levers (unleashing the individual)
  • leadership for
  • operational levers (executing against the plan)
  • organizational levers (assigning accountability and rewarding cost consciousness)
  • to remain Fit for Growth
  • strategic levers (translating strategy into performance)

T

• “table-stakes” costs
  • defined
  • zero-basing
• talent
  • as building block of organizational DNA
  • footprint optimization
  • See also employees ; midlevel management ; senior management
• targets, defining
• technology. See digitization
• time and motion studies
• timing, for Fit for Growth approach
• tools, for cost reduction. See cost reduction levers
• total shareholder return (TSR)
• training
  • for change management
  • delivering, for execution of transformation
  • developing plan for
• transformation team
  • engaging, for change management
  • establishing
  • evolution of
  • execution by
  • leadership during restructuring (See leadership, during restructuring )
• “T-shaped” steering team meeting structure

U

• uncertainty
  • about change, (See also change management )
  • addressing
  • of employees, during restructuring

V

• value/value creation
  • framing options to accelerate value creation
  • with outsourcing
  • relationship to complexity (See portfolio rationalization)
  • understanding value creation levers
  • value add/non-value add analysis
  • value assessment and zero-basing process
  • value capture and process excellence
  • value chain and process excellence
  • value-stream mapping
  • See also redesign process for operating model
• vendors. See outsourcing
• voluntary separation, managing

W

• Walmart
• Welch, Jack
• working team, for transformation
• workload demand profile
• world factory “network” archetype
• Worling, Ian
• Wurtzel, Sam

Z

• zero-basing
  • avoiding pitfalls of
  • best practices
  • defined
  • example
  • myths about
  • process of
  • recognizing need for
  • uses of
  • as versatile and holistic cost lever