Whenever managers at my company have a meeting to discuss a new direction, a new investment, or how to enhance the bottom line, we automatically categorize each expenditure as strategic or non strategic. The reason is simple, and very powerful. We will ruthlessly cut non strategic costs to the bone. This simple concept, applied with commitment and unwavering resolve, is more powerfully profit maximizing than the most complex and detailed business treatise or process ever conceived. It is common sense, yet the very fact that ninety five percent of businesses and managers don't practice it creates an enormous competitive opportunity for those of us who do.
Excellent management is eighty percent art and only twenty percent science.
Applying that intelligence and judgment on an ongoing basis distinguishing the truly worthwhile strategic expenditures from non strategic costs - is what makes your job challenging and fun. In the end, however, you must be able to identify enough worthwhile strategic expenditures to ensure that you are outspending your competition for strategic costs by a considerable margin, as a percentage of revenues if not in absolute dollars. By spending more on truly strategic costs, you build your business. Assume it can be eliminated unless proven otherwise. The average Fortune 500 company generates ten reports for every one it needs.