Cost programs fail when they cut muscle along with fat. Here are five structural levers that expand margin without starving the growth you’ll need next year.
When margin comes under pressure, the instinct is to cut — fast and across the board. It’s also the surest way to do lasting damage. Indiscriminate cost-cutting trims the capabilities a business needs to grow, and the savings rarely last past the next budget cycle.
The better approach separates structural cost from strategic cost, and pursues margin from both ends of the P&L at once. Five levers, in our experience, deliver the most durable improvement for mid-market companies.
First, strategic sourcing: most mid-market firms have fragmented, unmanaged spend that consolidates into real savings with a clear should-cost view. Second, pricing — the fastest lever most companies aren’t pulling, where even small architecture changes recover margin quietly given away.
Pricing is the fastest lever most companies aren’t pulling — and the one they’re most afraid to touch.
Third, complexity reduction: SKUs, specs, and processes that add cost without adding value. Fourth, SG&A redesign tied to the operating model rather than headcount targets. Fifth — and most overlooked — working capital, where trapped cash can fund the very growth the cost program is meant to protect.
The discipline that makes all five stick is the same: a clean baseline, named owners, hard targets, and a tracking cadence that follows the savings all the way to the P&L.
Key takeaways
- 01Separate structural cost from strategic cost before cutting
- 02Pursue margin from both procurement and pricing
- 03Track every saving to the P&L with named owners
Marcus Halden
Marcus spent twelve years at McKinsey leading strategy and performance work for industrial and consumer clients before co-founding Halden & Reeve in 2011. He has helped mid-market and PE-backed companies remove over $200M in structural cost and find growth their boards could fund.
