Ready, Steady, Manage: Book Review : Driving Down Cost by Andrew Wileman

A highly relevant book to read in these cost cutting times. Andrew Wileman evidently having seen it and done it - and now presenting useful advice on the art of cost cutting.

Before started reading I noted down what I expected to see advice about:

becoming more effective,

getting rid of underperforming staff now and quickly,

driving out a bonus on sales culture,

etc.

I did have the concern that I would see too much advice on short term unitary costs and ignoring end to end transaction costs - and after reading I think I still have the concern that Wileman didn't deal with that topic effectively.

All other topics get excellent coverage and worth a read. Andrew provides a lot of other useful advice that I did not initially think of.

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Andrew Consistently makes the point that cost cutting responsibilities lie with all managers - whatever their level, and that this behaviour (rewarded or not, noticed or not) always benefits. This responsibility makes up a large proportion of a manager's time and the the decisions that you have to make do not fall into the easy category. But as a manager you shirk that responsibility at the expense of your department/team/business expense.

The book has the subtitle "How to manage and cut costs intelligently" so early in the book we learn:

to keep a constant eye on the costs

coupled with continual improvement (to gain efficiencies)

tenacious pursuit and dogged persistence of reinforcing the message

frequent checking of progress and impact of cost reduction

constant checking of the 'why' for proposals for investment

In fact chapter 2 probably offers the most value in the book.

Numerous techniques get presented in the book, including:

for gaining visibility into costs

planning for big wins above smaller wins

cost trends

tackling people costs, including outsourcing and managing average and poor performers

Suppliers and negotiation with suppliers gets a full chapter to itself. We receive the advice to maintain multiple and competitive suppliers so that you don't get locked in to a single supplier and remove your bargaining power. A very important chapter with many strategies presented.

Several case studies help towards the end of the book - in particular a pretty damning analysis of the UK's labour government's handling of public spending on civil service and other government department costs which perked the book up towards the end.

We also receive advice on using technology to help lower costs through effective use of the internet. And more general advice on:

Effectiveness

Simplification

Quality

Let the customers do the work

Turn cost into revenue

The only issue I have relates to the notion of end to end transaction costs. Which I don't think comes through the book strongly enough. Andrew Wileman uses a comparative example of travel expenses where Jack Welsh would allow his managers to live the high life in good hotel rooms, and Sam Walton would share rooms with his managers to save costs. The question "So which is right?" The answer aims towards the frugal. But what we really require to answer the question involves and end to end analysis of the costs.

With Sam Walton - did the staff get enough privacy to conduct their own business, did one person snore and cause the other to lose sleep and therefore become inefficient? Did GE pay too much? Would cheaper rooms provide the essential soundproofing and comfort required to allow a manager to do their job properly, without going so cheap that they felt cheated or hard done by. The notion of balance and value did not come through well enough for me.

Deming provides a good example of end to end costs in "The New Economics" where the company cut down on costs of travel so much that the staff took far longer to travel than necessary and ended up tired and inefficient as a result. Sometimes 'cash' costs do not tell the whole story and I don't think that "Driving Down Cost" does enough to stress that - although I think the early portion of the book does edge towards that.

So a well written fast and enjoyable read. But I don't think it provides the whole story - so throw in a reading of Deming as well and I think you'll have a lot of good information and techniques for reducing your costs.

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