What Really Matters:

Relevant Thought

EMG was founded in 1996 as an information technology management consulting firm.  The initial focus was on providing interim Chief Information Officer service to CEO's and diagnosing and repairing failing IT projects ranging in size from $10 million to $120 million.

After several years of reducing IT budgets while improving service, EMG used its cost reduction process to address an enterprise wide cost solution. A $9 billion insurance company was converting from a mutual to a public company and needed to reduce costs. Using EMG's SEI process, operating costs were reduced by $35 million in eight weeks and the IPO proceeded. 

Primary Concepts:

  • Whether the cost are really cut and sustainable

  • Improving employee engagement in the process

There are two typical approaches to cost cutting.  The CEO sets a 10% goal and absent useful metrics, in the spirit of fairness, assigns the same goal to each officer.  This approach penalizes high value organizations with the 10% reduction and rewards low value organizations by allowing them to keep 90% of their costs.

In the second approach the CEO hires consultants to reengineer the company, redesign processes, renegotiate service contracts and generally make the employees miserable. The results can take many months or years to materialize.  Irregardless of the results, the consultants get paid.

EMG's Sustained Earnings Improvement (SEI) takes a completely different approach, one that produces the appropriate percentage for each organization while improving morale rather than destroying it.