Alternative Selection – More Efficient Processes Can Increase Costs

There is a common misperception that being more efficient necessarily equates to being more cost effective. However, that relationship does not necessarily exist. While seemingly desirable to be more efficient, the benefits may not necessarily be cost reductions. In fact, depending on where the efficiencies are gained within a given process, higher costs may be incurred. Consequently, leaders must articulate their goals as a specific outcome to be achieved, cost reductions being one, and not simply as a desire to be more efficient.

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Additional Information

Additional information on determining the overall value, including cost reduction potential, of initiatives can be found in the following StrategyDriven articles:

• Total Cost of Ownership
• Total Benefit of Ownership
• Total Value of Ownership

About the Author

Nathan Ives is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

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