Does Your Business Know Where Its Money Is Going?

This episode explores cost transformation in business, emphasizing its strategic role in driving growth rather than just survival. Against the backdrop of economic uncertainty, inflation, and rapid technological change, traditional cost management approaches are deemed insufficient. Karin von Funck argues that successful companies use cost transformation to outperform competitors by viewing cost as a strategic element. More significantly, cost transformation involves understanding where money and time are spent, assessing the value of those expenditures, and aligning spending with business priorities. The discussion pivots to the importance of a continuous, culturally embedded approach to cost management, exemplified by zero-based budgeting, which questions every expense from scratch each year. The biggest mistakes companies make include cutting into essential areas, failing to communicate the purpose of cost transformations to employees, and treating it as a one-time event rather than an ongoing process. Ultimately, cost transformation is not merely about cutting expenses but about strategically reinvesting in areas that drive growth and building critical capabilities, making it a necessity for leading companies.