BJA | TDM

Point of departure:

While I am sure there would be more nuanced definition of cost from the economics and finance literatures out there. 

For the context of this reflection,

Cost is simply, the price paid for a deliberate action towards an incremental/desired output or the unwarranted/unintended consequence of inaction or a failed action. 

Why/context: 

1. The last 9-12 months have intensified and revamped my perspective of how I see this strategic item line no one wants to see increase because of the expenditures attached to it. Working in dynamic and sometimes complex operational landscape has provided a front row seat to learn, influence, and experience a few perspectives play out daily. Some of which awakened the unfolding reflection. 
2. My current world is all about solving for risks, mitigating as much as we can and delivering the incremental 1% that would hopefully compound into value for the customers and the business outcomes. Cost is one of the key line items of discussion during execution and planning as I imagine it would be across other walks of life. 
3. Value usually has a cost attached to it be it in life and business, and better proactively addressed and engaged per time. 

What: Hopefully a new perspective and a more proactive way to navigate cost leadership as a strength in life and business. 

Value = Output – Cost

1. From personal finances, growth ambitions to boardroom decisions, we usually look to or hope to achieve more from less or operating at a high level efficiency. Potentially tied to the human nature to clinch a win or a fair deal from the optimal to minimal amount of input per time.
2. We are in a constant cost and reward dynamics and perhaps not proactively acknowledging it as much as we should. 
3. Getting ahead of cost and the connection to processes, human behaviour and market forces could unlock some needed oxygen especially when value is stagnant or dwindling.
4. Regardless of the top line, value is only returned when the cost is lower or stable. Value takes time to compound or be delivered sometimes, cost has been for years a stop gap initiative to mitigate the valley phases or accelerate delivery of value. 
5. The cost items required to stay ahead/afloat is innovation, discipline and resilience, when competition for value stiffens and the top line comes under pressure. And execution usually demands time, focus and energy but also some financial investments.
6. Value would always be under the threat of competition. Cost leadership is a space historically left for finance, accounting execs and PnL owners. A unique perspective and toolkit to bring to the table as professionals and individuals within our spheres of life.
7. There could be an untapped opportunity to proactively get involved in the cost line and help actively mitigate or invest it for executable upsides and value generation. Could also set us apart and spotlight meaningful contributions to what I believe would always have a place in boardroom discussions but also the currency for progress in our personal life journeys. 

Takeaways:

1. Cost is a key component of the value equation. 
2. A good grasp, assessment and commitment to action could help mitigate the slow velocity phases in life and tough market landscape in business. Hopefully offering an enhanced position for some marginal value generation. 
3. Every 1% generated from action counts and should compound in value over time.

Transitioning from cost to value – Potential pathways to explore: 

1. Operational excellence: Can we iterate and trim the waste from the old to form a more efficient upgrade?  Is there more we could optimise in the meantime? 
2. Execution and experimentation: What’s the minimum viable product that would tell us the next clue or give the 1% improvement? 
3. Expanding the value and opportunity window: What are the cost lines keeping customers/stakeholders/business awake, can we help them save some of these cost (time, resources, money) in exchange for value and partnerships? 
4. Stakeholder management, relationships and time investment: Are there losses to cut, relationships to sow more time into or withdraw more hours from?
5. Systems thinking, process and value chain mapping: Where are the broken nodes, and the one single action of commitment to address and ensure progress?