Generating Cash: BCG and Knowledge@Wharton
Episode Description
Part 1: Generating Cash: In a downturn, cash is critical to survival. In this special video report, experts from Wharton and The Boston Consulting Group outline seven cost-cutting and cash-generating actions that companies can take to boost cash flow and win as an economy cycles through contraction and expansion. Many businesses find they can cut overall costs by 15% to 20% fairly quickly -- without undermining core business strengths -- by taking actions such as rethinking current activities, optimizing fixed assets, and tightly managing receivables, payables and inventories.
Brief Summary
Companies can cut costs and manage cash effectively during downturns by prioritizing efficiency and focusing on core strengths.
Key points
- Triage in Business. Companies need to prioritize cash flow and cut costs quickly to survive economic crises.
- The Rule of 3/3. BCG's rule suggests a third of projects should be stopped, a third are winners, and a third need work.
- Managing Cash in a Downturn. Focus on receivables, inventories, and payables to conserve cash during tough times.
- Strategic Cost Cuts. Cost cuts should align with strategy to ensure long-term success post-downturn.
- Positioning for the Upswing. Liquidity generated during downturns can position companies for success in recovery.
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Episode highlights
- Triage in BusinessCompanies need to prioritize cash flow and cut costs quickly to survive economic crises.“Cash is the lifeblood of a business.”0:21Sep 29, 2009
- The Rule of 3/3BCG's rule suggests a third of projects should be stopped, a third are winners, and a third need work.“The rule of 3/3 is a third are winners.”2:43Sep 29, 2009
- Managing Cash in a DownturnFocus on receivables, inventories, and payables to conserve cash during tough times.“My three top recommendations for conserving cash are receivables, inventories, and payables.”3:23Sep 29, 2009
- Strategic Cost CutsCost cuts should align with strategy to ensure long-term success post-downturn.“All cost cuts should be made in the context of strategy.”6:36Sep 29, 2009
- Positioning for the UpswingLiquidity generated during downturns can position companies for success in recovery.“These steps will generate liquidity to weather the storm.”6:51Sep 29, 2009
Episode quotes
Tension
45/ 100Some tension
