MDM Premium
Need Help?
(888) 742-5060

In The News:

Tip: Separate Operational Spending from Strategic Spending

Tip: Separate Operational Spending from Strategic Spending

November 7, 2012
Reprints
A A

In good times when business is expanding, it's easy for managers to not pay much attention to long-term strategy. As a result, when a downturn comes, any cuts that you make may end up cutting your ability to rebuild your capabilities later, says Robert Kaplan in Take Strategy to the Front Lines. Separate what you spend on operations from what you spend on building strategic capability to position yourself for growth long-term.

"During a slowdown you have to look much more closely at all the spending programs and all the capacity you have put in and hold onto only those that you want to sustain into the future," Kaplan says. "That's where strategy helps you focus."

Know what type of company you are and what type of company you want to be to make more strategic cuts that will help in the long- and short-term.

Identify what the strategic capabilities you have are and what parts of your business support them. And then make sure you protect those assets when cuts are necessary – whether those assets are personnel or capital equipment.

Copyright ©2014

Please do not reprint MDM's content on your website without MDM's express permission as it is copyrighted material. To gain permission, email us, or call 1-888-742-5060. For information on PDF or print reprints, visit www.mdm.com/reprints. MDM welcomes inbound links from your site. Please cite Modern Distribution Management.

Post a comment to this article

Partner Center