Costing

You've been ordered to reduce overhead by 10%, 20%, or even (wince) 30%. How do you do it? First, don't expect to reach your target with a single big...

Many companies abandoned activity-based costing because it did not capture the complexity of their operations, took too long to implement, and was too expensive to build and maintain. Here’s a way around those problems.

Few, if any, articles on finance that have appeared in HBR have enjoyed the influence of the 1962 article reprinted here as a “Classic.” Gordon Donaldson’s analysis of how many companies haphazardly established their debt capacity, and his careful explanation of what he considered a better way, seemed to strike a chord among corporate administrative […]

Employees are constantly in motion—making sales calls or taking service trips; visiting an international office for a few days or relocating there for a few years; soaring across oceans in the corporate jet or heading across town in the company car. Typically, these activities are administered by an assortment of departments and vendors. But we […]

Michael Porter and Robert S. Kaplan, Harvard Business School professors and authors of the HBR article How to Solve the Cost Crisis in Health Care, explain why providers must start with proper measurement.

Most of modern global strategy focuses on minimizing differences between countries. Perhaps it’s time to dust off approaches that exploit those differences as well.

A hot labor market is limiting employers’ ability to shift more costs to their workers.

Easy credit means hard choices. The old consensus between lenders and corporate borrowers about what constitutes a prudent level of financial reserves has broken down. Today’s junk-bond financiers, merchant bankers, and “credit corporations” offer far more leverage than businesses have historically been comfortable with, and these venturesome lenders pose a difficult problem for management. Managers […]

Probably not, if your company is like most

Costs are going through the roof again. It’s time for you to act.

From where I sit as an economist, it’s still all about the economy and the long-term impact of the problems laid bare by the Great Recession. During the financial crisis, the world came to the apparently shocking realization that debt financing entails risks. Financial institutions, households, and governments all suffered because they had too much […]

In my last post, I talked about the ways you can use green data — footprinting information on your products and services up and down the value chain — to create enormous value for your company. As they say, you can’t manage what you don’t measure. And those with the best information can cut costs, […]

A lot of companies in a lot of places these days have been struggling to cut costs. Most of them are discovering the hard way that they have for too long put up with too much redundant and wasteful activity. For many, the problem is only starting, largely because thus far they are simply “mandating” […]

Bankruptcies, scandals, an unsatisfying stock market—what’s a leader to do? One way to get your company going is to stop putting out old fires and get

Realistic information on the impact of inflation can make both government and the public aware that business profits are too low

Innovative hospitals in India are pointing the way.

Imagine the disasters that would befall your company if your chief financial officer didn’t understand basic finance. That’s the situation facing most of your employees, who are, in effect, the ill-prepared CFOs of their own lives, responsible for setting household financial policies and evaluating complex borrowing, investment, and insurance choices. One of the best benefits […]

The most popular offshore sites for service functions are overheating. Now is the time for companies to explore a world of opportunity beyond those hot spots and to base investment decisions not just on costs but also on talent, markets, strategic aims, and appetite for risk.

Few truisms apply universally in the business world, but four related ones are valid in every business situation. 1. Over the long term, it is absolutely essential to be a lower cost supplier. 2. To stay competitive, inflation-adjusted costs of producing and supplying any product or service must continuously trend downward. 3. The true cost […]

If you put an energy meter inside a home and show people total usage in real time, a miraculous thing happens: they use about 10 percent less energy. The simple act of placing data in front of people changes their behavior. Data makes people smarter and inspires them to make small changes to save money […]