Cost Leadership: Cutting Costs at the Top

I decided my blog will focus on ways to help small to mid-size businesses navigate the competitive online marketing world, with a small to non-existing budget, BUT today I have to talk about cost leadership. I researched this phrase and the results were shocking! Not even one article addresses the real cost leadership strategy, and the solution is in the name itself!

Leading by Example:

Today, I’m diving deep into the world of cost leadership. You know, that strategy where companies try to outdo their competition by offering products or services at lower prices? Yup, that's the one! 🎯

Now, don't get me wrong, cutting costs is essential for any business looking to stay afloat and be competitive. But here's the thing, there is a more comprehensive approach to cost leadership. One that goes beyond just slashing expenses at the operational level.

What is Cost Leadership?

In the fiercely competitive business landscape, many companies adopt cost leadership as a strategy to gain a competitive advantage. Traditionally, this approach focuses on cutting costs at the operational level to offer products or services at a lower price than competitors. While cost-cutting measures are essential, it's crucial to take a more comprehensive approach that considers all levels of the organization, including the treatment of low-mid level workers and the quality of products and services.

I came across many eye-opening articles that shed light on the blind spot that will fix all cost leadership problems and propel businesses to the top.

The first example is an infuriating situation involving a CEO in the US. This particular executive, let's call her Andi Owen, works at a prominent furniture company. Now, here's where the frustration begins. While the company decided to withhold employee bonuses, Andi herself didn't hesitate to award herself a staggering seven-figure bonus of $1.2 million last year. 😲

In a leaked Zoom call, Andi Owen can be heard berating her employees for daring to raise concerns about the missing bonuses. Instead of addressing their valid questions with empathy, she went on a rant, making it clear that her priorities lay elsewhere - specifically, achieving a $26 million sales target. Now, we're all for ambitious goals, but what rubbed me the wrong way was her dismissive attitude towards the hardworking folks who help the company thrive. 🤨

Watch this justice warrior here: CEO shows the real priorities of the company

At times like these, it's evident that the best place to start cutting expenses is not by compromising the livelihood of the valuable employees, but by reevaluating executive compensations. If a CEO is rewarding themselves lavishly while denying bonuses to those on the front lines, that's a red flag. A clear disconnect between management and employees can be detrimental to the overall health and success of any business. 🚩

Here is another justice warrior that talks the talk but doesn’t walk the walk: CEO threatens employees after a big layoff

Why it’s important to take care of the low-mid level workers?

First things first, I want to emphasize the significance of the low-mid level workers. These amazing folks are the unsung heroes of all businesses, keeping things running smoothly day in and day out. Treating them right and creating a positive work environment is absolutely vital. When the employees feel valued, supported, and happy, their productivity soars, and that's a win-win situation for everyone! Plus, it reduces employee turnover, saving money on hiring and training new team members. 🤝

Treating low-mid level workers with respect, providing fair wages, and offering opportunities for growth and development is crucial for fostering a positive work culture. Employees who feel valued and appreciated are more likely to be engaged, loyal, and dedicated to the company's success. Moreover, investing in employee well-being and professional growth contributes to creating a skilled and motivated workforce, capable of driving the company forward.

Here are some proof of the money not being well distributed in the company:

CEO pay has skyrocketed 1,460% since 1978

Now, can you really say that for a company to thrive you need to cut costs at the bottom?

GreedFlation!

Greedflation, a term derived from "greed" and "inflation," refers to a troubling economic scenario where excessive corporate greed and profit-seeking behavior contribute to a surge in inflation rates. When businesses prioritize maximizing their profits at the expense of fair pricing and the well-being of consumers, it can lead to inflationary pressures within an economy. Greedflation highlights the negative consequences of unchecked greed, as companies raise prices and reduce the value of money, ultimately eroding the purchasing power of consumers. This phenomenon poses significant challenges to economic stability and can exacerbate income inequality, impacting the overall prosperity of a nation and its citizens. Again, you can look at the “top dogs” of any corporation to see who’s to blame. This affects the quality of the products and food that we buy.

• Quality Over Quantity

Another issue I’d like to address is the use of hazardous or low-quality materials in products. Let's face it, cutting corners and using cheap stuff might save a buck, but it's not worth the risk. Not only does it jeopardize the safety of your customers, but it also tarnishes the brand's reputation, and those recalls are not cheap. In today's world, where consumers demand transparency and ethical practices, you can't afford to skimp on quality and safety. 🛡️

Choosing to prioritize quality over quantity sends a powerful message to customers. By delivering superior products and services, businesses can build a loyal customer base and attract new clients through positive word-of-mouth. Ethical practices and product integrity resonate with consumers, leading to long-term brand loyalty and increased market share.

• Caring for Our Target Audience

I know, I know, we're all trying to offer the most affordable options out there. But hear me out - providing low-quality goods, especially when it comes to food, can have dire consequences. It's not just about profit; it's about taking care of the customers. Using subpar ingredients might lead to foodborne illnesses or health issues for the precious target audience.

Here is proof of greedflation and the news outlets they have in their pockets. Mainstream media is dead. Reporters are no longer the seekers of truth; they are the watch dogs of the corporations and our enemies:

Greedflation was fake yesterday, and good for you today.

Advantages of cost leadership strategy

So, here's my proposal - let's take a more holistic approach to cost leadership. 🌟 Let's invest in efficiency-enhancing technologies and processes to save costs while maintaining quality. But, at the same time, let's treat our employees like the rock stars they are, offering fair wages and growth opportunities. And you know what? By prioritizing quality over quantity, we'll earn the loyalty of our customers and build a stronger brand. It's a win-win for everyone! 🏆

I’m not even goanna expand about union suppression, to keep their enormous profits. You can google it, but it’s not for the faint of heart, so do it at your own risk.

I firmly believe in leading by example. Instead of instilling fear and frustration among your team, foster a culture of understanding and collaboration. A CEO should be a champion of equity and inclusion, not just on Instagram, but in practice too. When the top leadership demonstrates care and concern for the well-being of their employees, it creates a ripple effect of positivity throughout the organization. Happy employees mean increased productivity and a stronger, more unified team, and healthy, quality products shows that we care about our customers; without them we are nothing!

But don’t take my word for it, look at this company’s growth, after this CEO put his employees first:

Dan Price: "After our $70k min wage: 76 percent of employees are engaged at work—2x the national average, customer attrition fell to 25 percent below [national] average, we expanded to a new Boise office & enacted $70k min wage there, our highest-paid employee makes 4x our lowest-paid employee—down from 33x," Price continued. "We started our $70k min wage with about 130 employees in Seattle. It worked so well we expanded it to a new Boise office, where the cost of living is lower but people deserve good pay all the same. We now have about 200 employees."

In Conclusion

So, as I discuss cost leadership, remember that it's not just about pinching pennies at the lowest levels. It's about being fair and responsible at every level, especially when it comes to executive compensation. Cutting costs is a balancing act, and it should never come at the expense of the people or your values. Let's lead with empathy, integrity, and a commitment to the greater good of our businesses and communities; It is cost effective.

Am I wrong? Tell me in the comments or contact me privately 😊