Manage Expenses Continuously 

By Ben DiSylvester
Chairman

In our nearly 40 years of helping financial services companies navigate various challenges, we have observed that organizations which manage expenses as part of their normal management process—through good times and not-so-good times—fare better in downturns. Organizations that have strong expense management discipline do not have to cut as deeply when the economy turns bad. And when the cycle turns up, good expense management discipline helps control the pressures to return to pre-recession spending levels.
 

For those organizations with no continuous expense management culture, all is not lost. As sales and workloads improve with the economy, all organizations should continue to manage expenses tightly. It will ensure that you don’t add back unnecessary capacity during the recovery and allows you to invest those funds in new sales efforts and technology, streamlining the organization for the long run.
 

There are at least four important elements all companies should use to instill a continuous expense management culture:

1. Manage staffing levels, using staffing models that show the levels of staff needed for current and projected work volumes. Staff is added only when the model indicates it is time to do so.
2. Manage service levels rigorously. Excellent customer service is not synonymous with high expenses. Rather, it is just the opposite. Set high goals for customer service, and task your people with making sure that those goals are met consistently without adding unnecessary staff.
3. Continuously improve your processes. This vigilance will free up resources that can be redirected to the right investments for growing revenues and streamlining the business model.
4. Pick technology investments that make it easier for your distribution system to sell, your customers to get things done, and your people to service and support both.