Build a Cost-Conscious Culture in Your Organisation

Build a Cost-Conscious Culture in Your Organisation


Vivek Sood




June 30, 2020

hudgeon12by Doug Hudgeon

The Cost Management Tip

Building Cost-Conscious Culture management in your organization is the most important tip I’ll deliver in this series of posts. If you can create a cost-conscious culture in your organization then you’re pretty much done and dusted. Nothing else you do will cut costs more.

Recently, I spent the better part of a year looking at cost savings opportunities in 120 companies across four continents. I found that the most efficient companies had one thing in common: Their staff – from the CEO down to the receptionist – were incredibly cost-conscious. Companies with staff who continuously questioned whether they were achieving their goals in the least expensive way were consistently more efficient than their more profligate competitors; regardless of the systems and processes, they had in place.

The cost-conscious culture in companies achieved and maintained their low-cost base by reducing demand and ensuring they identified the simplest solution. If they didn’t need to buy a particular product or service, they wouldn’t buy it. If they did need to buy something, they would buy the lowest cost product or service that met their minimum requirements. The outstanding question, of course, is how do I create a cost-conscious culture in my organisation?

In the remaining tips in this series, I will give my views on achieving this and improving the operating efficiency of your organisation. Related web sources In the tips, I will link to an article that supports the tip.

The below article is an exception in that it provides a cautionary tale for those companies embarking on a cost reduction journey. The article compares a company with a culture based on customer service to a company with a culture based on cost savings had this warning for both companies: “there are countless efficiency ideas inside his company [Customer service oriented company] which never see the light of day because the happiness culture shuts them down.

Similarly, there are customer satisfaction breakthroughs which never surface at the low-cost manufacturer I mentioned earlier where everyone is implicitly taught to only support cost-saving ideas” Related books The End of Growth: Adapting to our new economic reality I haven’t bought into the thesis of this book.

Whilst I believe that we are in a sideways market and that, for the next few years, most companies will only improve their operating efficiency through cost reduction; I don’t believe that the global economy has peaked. Over the past 200 years, too many people smarter than me have predicted this and been proven wrong. Nevertheless, the book is well written and well researched and worth reading. “Economists insist that recovery is at hand, yet unemployment remains high, real estate values continue to sink, and governments stagger under record deficits. The End of Growth proposes a startling diagnosis: humanity has reached a fundamental turning point in its economic history.

The expansionary trajectory of industrial civilization is colliding with non-negotiable natural limits. Richard Heinberg’s latest landmark work goes to the heart of the ongoing financial crisis, explaining how and why it occurred, and what we must do to avert the worst potential outcomes. Written in an engaging, highly readable style, it shows why growth is being blocked by three factors:

  • Resource depletion
  • Environmental impacts
  • Crushing levels of debt

These converging limits will force us to re-evaluate cherished economic theories and to reinvent money and commerce. The End of Growth describes what policy makers, communities, and families can do to build a new economy that operates within Earth’s budget of energy and resources. We can thrive during the transition if we set goals that promote human and environmental well-being, rather than continuing to pursue the now-unattainable prize of ever-expanding GDP.”

Doug Hudgeon who is lawyer and vendor management professional who has branched into finance and accounting shared services management.

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  1. These ideas and concepts will be usually expressed by our thought leaders in multiple forums - conferences, speeches, books, reports, workshops, webinars, videos and training. You may have heard us say the same thing before.
  2. The date shown above the article refers to the day when this article was updated. This blog post or article may have been written anytime prior to that date. 
  3. All anecdotes are based on true stories to highlight the key points of the article - some details are changed to protect identification of the parties involved. 
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Vivek Sood

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  • As I studied cost conscious is being aware of how much can you afford and how much the price is. it also stands for how aware you are of your budget and how much do you want to balance it. actually, were we to redefine it as cost subconsciousness, it would make more sense. we buy every day and we spend every day, be it our newspaper in the morning or our bus ticket to office a little later or pay for petrol for our vehicles en route place of work or buy snacks and coffee in office, the very cost continues to ring in our head ( thoughts ) and we keep calculating inwards how much is left in our wallets or vanity bags, and what spending would or could be due before we call it a day. somewhere deep inside, it’s cost-consciousness which makes us bargain or haggle over a price or simply move on to an inexpensive brand in the market. same is true for the mode of travel we choose for outstation visits or the choice of boarding and lodging or inland transport as a tourist. these are but a few examples.

  • To me, cost-consciousness means creating an enduring corporate culture focused on strong and sustainable cost discipline. Of course, this also requires universal and tireless efforts to engage and motivate the entire organization to deliver on that vision.

    Simply, it’s about being commercially minded – having a sensible lens that looks at the cost in context with market drivers and an understanding that meaningful changes to your business’ financial performance require more than a fine-tuning of your cost base.

    “A Cost Conscious Culture is about helping everyone from the C-Level to those in the field understand how they can optimize their cost base and empower them to take action.” (

  • Useful tips for cost reduction in the organization. I noticed 3 points in above blog. Resource depletion, Environmental impacts, Crushing levels of debt. I agree that we can overcome and avoid Resource depletion or Crushing levels of debt. But if we suffered Environmental impacts like the US facing biggest storm there. how can we overcome by this?

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