Here’s something most executives won’t admit: their last cost-cutting initiative probably failed. Sure, there were some wins early on, maybe even a nice bump in the quarterly report. But a year later, those savings vanished and everyone’s back where they started. John Joseph Carpenter has watched this cycle repeat itself for 30 years. As a national practice partner at ERA Group specializing in strategic cost advisory, he’s seen it all. His background spans CPG strategy, consulting, flying corporate jets, serving as an elected official, and now advising companies on where their money actually goes.
Treating Cost Cuts As Quick Fixes
Companies love the big launch. There’s a kickoff meeting, some ambitious targets, maybe a consultant or two brought in to validate the plan. Budgets get trimmed, hiring freezes go into effect, and a few contracts get renegotiated. Then everyone moves on to the next priority. “Too many companies launch a cost cutting initiative as if it’s a box to check. They trim budgets, freeze hiring, negotiate a few contracts, and then move on,” Carpenter explains. Fast forward six months and the cracks start showing. “The problem is, without a continuous process, those savings don’t stick. Inefficiencies creep back in, and within a year or two, the same problems resurface,” he notes. It’s like going on a crash diet instead of changing how you eat. You might lose some weight fast, but it all comes back because nothing really changed.
Leaders Focusing On Headlines
Closing a facility makes headlines. Laying off 10% of the workforce gets attention from Wall Street. Executives like these moves because they’re visible and decisive. But Carpenter keeps seeing the same mistake play out. “Executives often chase the big visible cuts, such as reducing headcount or closing facilities, because they make bold headlines,” he says.
Meanwhile, money bleeds out through a thousand small cuts that nobody’s paying attention to. Vendor contracts that auto-renew every year. Software subscriptions that pile up because nobody’s tracking them. Logistics costs that seem reasonable until someone actually looks at them. Marketing budgets that flow out the door without anyone measuring what comes back. “These areas rarely get the same scrutiny, yet they often hold the largest untapped opportunities,” Carpenter points out. Most companies don’t have a revenue problem. They have a waste problem.
Efforts Fail Without Ownership And Accountability
Finance teams can build perfect models showing exactly where to cut. They can present beautiful slide decks with all the numbers color-coded and validated. None of it matters if the people actually spending the money don’t care. “Another reason cost initiatives collapse is lack of ownership. Finance may run the numbers, but if department leaders don’t buy in, nothing changes,” Carpenter explains. Getting buy-in means getting serious about who owns what. Every team needs targets they understand and actually believe in. Progress needs tracking that makes sense to people doing the work, not just the CFO. When someone hits their numbers, celebrate it instead of just moving the goalposts. “Accountability has to be shared across the organization. That means setting clear metrics, tracking results, and celebrating wins when teams hit their targets,” he says. Cost efficiency can’t be finance’s job. It has to be everyone’s job.
Cost Strategy Must Align With Growth Strategy
Some companies cut costs because they’re desperate. The business is struggling and cutting seems like the only option left. Other times, it’s just something companies do every few years because that’s what companies do. Either way, cutting without thinking about what comes next is a recipe for a slow death. “Companies fail when cost cutting becomes an exercise in survival rather than a sustainable strategy,” Carpenter notes. Smart cost work does something completely different. It creates breathing room to invest in what matters. New products that might actually sell. Training that makes your team more capable. Markets that offer real growth potential instead of just more of the same. “Cost decisions should free up capital for growth, whether that’s for innovation, talent development, or expansion,” he explains. Saving money just to save money misses the whole point.
The same story plays out over and over. Big cost initiative launches. Early results look promising. Savings evaporate. Leadership scratches their heads wondering what went wrong. “Most cost cutting efforts fail because they’re treated as temporary fixes, focused on the wrong priorities, lacking accountability, and disconnected from growth,” Carpenter observes. Breaking out takes a completely different mindset. Cost discipline has to become part of how the company operates, not something special you do when times get tough. Leaders need to look past the obvious big moves and find where money’s actually being wasted. Teams across the company need real ownership of the problem. Every dollar saved needs to support where the business is trying to go.”When you treat cost discipline as a long-term strategy—one that uncovers hidden waste, engages leaders, and fuels innovation—you not only unlock profitability, you protect it,” he explains. Carpenter’s focus stays on helping organizations find money they didn’t know they were wasting. It’s sitting there in plain sight. Someone just needs to point it out.
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