Disclose 27, Focus piece 3: Fit for Growth – the smart way to cut costs, restructure and renew

Disclose – PwC’s online magazine

«It takes people, digital technologies and trust to achieve top performance.»

Reading our latest issue of Disclose (disclose.pwc.ch/27/) you’re sure to get an adrenaline rush as we investigate a topic with particularly close connections to sport: high-performing organisations.

Focus piece 3 gives you an insight into the topic Fit for Growth – the smart way to cut costs, restructure and renew

Companies across industries and geographies are realising that the only way to unleash profitable growth is to cut costs as rigorously as they concentrate on growing revenues. As with any living organism, there’s no profitable growth without equally robust pruning. To get fit enough to thrive in an increasingly tough environment, you need to focus on a small number of differentiating capabilities, align your cost structure to these capabilities, and organise for growth. In this article we look at how the world’s fittest companies have mastered these three components to achieve and maintain healthy, profitable growth – and at the principles that can enable companies in this country, to to prune their business for sustained success.

Read the full report here.

Contact

Niklas Hoppe
Partner, Strategy& Switzerland
+41 58 792 2875
n.hoppe@strategyand.ch.pwc.com

Fit for Growth: or what financial services leaders striving to grow and prosper can learn from wise gardeners

Smart businesspeople, like good gardeners, realise that you have to cut back to stay strong and stimulate growth. On 1 February, a select group of financial industry leaders came to our event on Strategy&’s Fit for Growth* approach to find out how some of the world’s leading organisations have learned how to compete and flourish by pruning intelligently and channelling their resources into the strongest and most vital parts of their operation – and how they could apply this know-how to their own business.

Business leaders are actually more like commercial fruit growers than amateur gardeners: there’s a lot more at stake if your whole survival depends on making the right choices. You have to prune back to survive and compete, but if you cut back too much or in the wrong places you can destroy the whole basis of your growth and livelihood. Strategy&’s Fit for Growth framework documents some spectacular examples of companies that have got cost-cutting wrong and gone under as a result.

But the people who came to the event on Fit for Growth (FFG) were more interested in stories of how to get it right. After a welcome by Daniel Diemers, Utz Helmuth and Torsten Eistert briefly introduced the FFG methodology. On the basis of decades of helping some of the world’s leading organisations to cut costs intelligently and invest in profitability, Strategy& – PwC’s strategy consulting arm – has come up with a highly effective approach called Fit for Growth. The idea of Fit for Growth is to make deliberate, holistic choices that will enable you to

  • focus on your unique differentiating capabilities
  • align your cost structure around ‘good’ and ‘bad’ costs and redistribute costs to make room for investment in differentiation and innovation
  • harness artificial intelligence and other digital technologies to help you achieve these goals.

The event continued with a keynote speech by PwC’s European Data & Analytics Advisory Leader, Christian Kirschniak, on how data analytics and artificial intelligence can fit into the Fit for Growth approach and help businesses achieve these goals.

Participants went away with some new and valuable insights into how to compete and succeed in an increasingly competitive climate – how to tread the line between cutting back too much and destroying your organisation’s vitality, and assessing your strengths so that you can prune wisely for growth and continued profitability.

*Fit for Growth is a registered service mark of PwC Strategy& LLC in the United States.

Contact

Utz Helmuth
Strategy&
+41 58 792 3159
utz.helmuth@strategyand.ch.pwc.com

Cut costs and grow stronger – Join our Fit for Growth Event

You don’t need us to tell you how tough it is to cover your costs in today’s global, digitally disintermediated financial services market, never mind post healthy profits.

What we can offer you is a proven approach to enable you to grow stronger and achieve healthy, lasting profitability.
 
We call this approach Fit for Growth, and it has already helped some of the world’s most prominent players get in shape to compete and flourish.

We’d like to invite you to join us and peers from the financial services industry for an evening on our Fit for Growth approach on Thursday, 1 February 2018. Basically you’ll find out how to grow stronger by making deliberate, holistic choices on where to invest in new cost-cutting technologies and where to cut costs, and in particular

  • how to focus on the unique differentiating capabilities
  • how to align your cost structure around ‘good’ and ‘bad’ costs and redistribute costs to create room to invest in differentiation and innovation
  • how artificial intelligence and other digital technologies will help you achieve these goals.

We’ll be starting the evening with a brief introduction to cost-cutting with our Fit for Growth framework, followed by a keynote speech from PwC’s European Data & Analytics Advisory Leader Christian Kirschniak on how data analytics and artificial intelligence can help you achieve these goals.

This evening will be well worth your while. We look forward to seeing you on 1 February!

Click here to register online

Please note that seats are limited.

Date and Time
Thursday, 1 February, 2018
18:00 – 19:30, followed by an apéro

Venue
Savoy Baur en Ville
Poststrasse 12
8001 Zürich

This time our new Fit for Growth* Event addresses mainly the financial service industry. In our next events we will cover other industries as well.

Contact
Utz Helmuth
Strategy&
+41 77 409 4571
utz.helmuth@strategyand.ch.pwc.com

*Fit for Growth is a registered service mark of PwC Strategy& LLC in the United States.

Strategy& Global Innovation 1000 Study

Why liberal locations are set to attract R&D, Tech firms dominate, Europe continues to slide and throwing money at research doesn’t make a company innovative

Investments by the 1000 largest listed R&D spenders globally has passed the USD 700 billion mark for the first time; Switzerland accounts for 4.3% of the total; Roche, Novartis, Nestlé hold top places in the ranking; Alphabet has taken over from Apple as the company seen as the most innovative in the world.

Let’s focus on some key points …

Liberal locations set to attract R&D
As the Economist puts it, “Bridges-drawn-up” (aka nationalist) policies proliferate in important Western markets. Put this in a context where digitization makes it easier than ever to shift R&D to suitable locations and where companies with a global customer base already intensify efforts to move close to local markets. R&D executives surveyed duly confirm that they shift medium-term spend to locations with a more liberal framework. Regional research centres staffed with local talent become more attractive and cost-efficient. Strong borders and economic nationalism weaken competitiveness faster than some policymakers may think.

Money can’t buy you everything

R&D spend does not correlate with recognition as a strong innovator. R&D executives surveyed now see Alphabet as the most innovative company in the world, overtaking Apple and ahead of Amazon, Tesla, Microsoft, GE, Facebook and IBM. Chinese group Alibaba is the new number ten.

Tech firms show their might

Tech firms have in the past years increased their R&D spend to pursue their “world dominance” paradigm, e.g. in new mobility, fintech and other areas. Amazon has moved to become first rank in terms of absolute spend. At the same time, some Tech firms already feel “old world” loss of innovativeness. Companies such as Intel and Samsung figure in the top four for R&D spend but don’t make the top ten in terms of being perceived as innovative. Visionary ideas combined with spending might will move the needle but few manage this tandem.

Europe, anyone?

This year’s top three in the rankings again illustrate the complete dominance by US tech players. Software and e-commerce firms make up the lion’s share of the twenty biggest R&D spenders. But tech players from Europe? Not one to be found. With US players investing massively in innovation, Europe will remain a distant third in tech at least. It’s not all bad news though. At least in healthcare, European – and in particular Swiss – players are relevant. Roche (ranked 7 for R&D spend globally) and Novartis (ranked 10) have further increased investment. Nestlé comes in at a more distant 80.

Read more

 

Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal

Fit for Growth is a unique approach to business transformation that connects strategy with cost management and organization restructuring. Drawing on decades of strategy consulting experience and in-depth research, the experts at PwC’s Strategy& lay out a winning framework that helps CEOs and senior executives transform their organizations for sustainable, profitable growth.

This short video helps illustrate some of the key themes in the book, and takes a light-hearted look at the question: “how do you cut costs in your organization to prepare for growth?”

For more information, check out Fit For Growth, by Vinay Couto, Deniz Calgar, and John Plansky. Wiley, 2017.

Learn more: http://www.strategyand.pwc.com/ffgbook

A Strategy That Works

How winning companies close the STRATEGY-TO-EXECUTION Gap

There are two kinds of companies today – those who are facing major strategic challenges and those who will face them. Indeed, almost all corporate leaders struggle with developing a strategy that works. Fifty percent of leaders don’t believe they have a winning strategy to begin with and nearly all report missing major opportunities in the market. This is because where their company aims to go is disconnected from what it is able to accomplish.

STW-book-cover300dpiStrategy That Works, a new book from Harvard Business Review Press by authors Paul Leinwand, Principal at PwC’s Strategy& and Cesare Mainardi, retired CEO of Strategy&, demystifies the perennial question of “why are certain companies so successful?” Strategy That Works guides corporate leaders through real-life examples of how successful companies around the world have bridged the gap between strategy and execution to rise to the top of their industries.

“Around the world, we are seeing companies wrestle with how to develop strategies that keep them competitive in an increasingly complex global marketplace”, said Dennis Nally, Chairman PricewaterhouseCoopers International. “All too often companies don’t think about strategy and execution together – Strategy That Works is an excellent guide to what companies need to do to bridge the gap and deliver sustained success.”

 

Learn more on how companies close the gap between strategy and execution and succeed in their market. Visit our homepage www.strategyand.pwc.com.