Cost savings is old hat

But if savings is old hat, why is it still so important?

A few days ago someone asked me the question, "What is better for a business saving $50M or making $50M?"  It's an interesting question and one with way too many facets to answer here, although you can feel free to discuss it in the comments below.  My answer to the question was... It depends.  First off, how much profit do you make on the $50M?  Second, how important is the savings on the bottom line vs. the increase in revenue?  I seem to always be the guy that answers a question with a question...  So far in my life that has not been a bad thing.

At the end of the day, saving $50M hits the books the same as making $50M in additional PROFIT...  Wrap your head around that for a second.  I have however worked for enough people to know that having $50M of additional revenue is important too the company valuation.  If the cost of doing business was not out of line with where it is expected to be (in other words, no one is expecting to find $50M in savings) then making $50M in revenue is a great thing.

The real answer is this:

Find all the savings possible that allow for increased revenue and you have a winner of a project.  That's really where every employee's head should be at... "How do I do my job more efficiently and effectively?"

If everyone thinks this way you end up making another $50M and saving another $50M... at 10% profit that's $55M on the company bottom line.  All I can say to that is "Yay!"