When under financial pressure or driving change, slashing costs seems like the quickest fix. Laying off employees, halving marketing budgets, cancelling contracts and cancelling projects—these are the hallmarks of cost cutting. But while this may give you short term financial relief, it often comes at the cost of long term business health.
Cost optimisation is the more nuanced, smarter approach that many leaders don’t adopt. It’s not a knee jerk decision to just spend less—it’s the practice of creating value, removing inefficiencies and waste sustainably. Cost reduction as part of cost optimisation is a continuous business focused discipline that minimizes spending while maximising business value. Evaluating office space as part of these strategies can lead to significant savings by reconsidering leasing strategies and addressing underutilized leases. Done right it doesn’t just save you money it makes your business an efficient growth machine.
To illustrate this, we need look no further than Elon Musk’s handling of social media platform X (formerly Twitter). His cost-cutting spree at DOGE is a cautionary tale of what happens when leaders confuse trimming the fat with cutting into the bone.
Introduction
The Department of Government Efficiency (DOGE) is a temporary organisation set up within the United States Digital Service (USDS) to advance the President’s DOGE agenda. The United States DOGE Service is a newly established initiative intended to modernize federal technology and improve efficiency within government operations. The primary goal of DOGE is to reduce federal spending and modernise federal technology and software to maximise governmental efficiency and productivity. In this section we will be looking at the concept of cost optimisation and its relevance to the federal government.
Understanding the Importance of Cost Reduction
Cost reduction is a crucial aspect of any organization, including the federal government. By reducing costs, the government can allocate more resources to essential services and programs, ultimately benefiting the citizens. The Department of Government Efficiency (DOGE) was established to achieve this goal. The DOGE Service Temporary Organization (USDSTO) was created to advance the President’s 18-month DOGE agenda, which aims to modernize federal technology and software to maximize governmental efficiency and productivity. This initiative is not just about slashing budgets but about strategically reallocating resources to enhance overall government efficiency and service delivery.
The Short Sighted Fallacy of Cost Reduction
At its core cost cutting seems simple. Identify areas of high spend, reduce them and voila—healthier profit margins. But in reality it’s rarely that simple.
Take the example of Musk’s X. Within weeks of acquisition he chopped the workforce, reducing operational costs overnight. Short term? Sure he reduced his payroll obligations. But long term? The platform has been plagued by outages, unmoderated content and declining user trust—issues that stem from the lack of key personnel. Similarly lease cancellations have been used by the US government to reduce costs associated with vacant or underutilised buildings. While this will give you significant annual rent savings it will also have long term negative impacts such as reduced flexibility and future costs. This transparency is crucial for building trust and ensuring that taxpayer dollars are used effectively. The public has a right to know about the management of tax dollars, especially when it comes to potentially unnecessary or wasteful expenditures.
Cost cutting means a lower workforce, poor morale, and lower product or service quality. Can any leader reduce costs by chopping headcount, but can they maintain long-term performance and build a path for growth? That requires a more disciplined approach.
The Smarter, Sustainable Option – Cost Optimisation for Taxpayer Dollars
Cost optimisation doesn’t just tweak numbers; it redesigns processes creating value by removing inefficiencies. Where cost cutting focuses on survival cost optimisation ensures both survival and future success.
For example one of Leanscape’s clients, Aramex, showed the clear difference between these two approaches. Rather than making arbitrary cuts in spending we worked with them to refine their operations through Lean Six Sigma principles. By streamlining workflows, reducing process waste and strategically re-allocating resources Aramex saved costs and unlocked capacity for sustainable growth. Our client continually repeated at our Lean Six Sigma training sessions, “Anyone can do cost cutting; you can do it in your sleep but that’s not why we are here. Be smarter.”
This didn’t diminish the business it strengthened the building blocks of its future success. Cost optimisation tackles waste not value.
Why Cost Optimisation Is the Better Leadership Strategy
- Preserves and Enhances Value
Cost optimization emphasizes efficiency and effectiveness, enabling businesses to maintain value delivery to customers while enhancing operational results. When executed properly, businesses discover they can achieve more with fewer resources, rather than merely sacrificing capabilities.
- Built-In Scalability
Where cost cutting strategies can leave businesses stagnant and struggling to get back on track cost optimisation prepares organisations for growth. By addressing inefficiencies and building leaner operations the business is ready to take advantage of growth opportunities without being stretched beyond its means.
- Empowers Teams
Cost cutting often alienates employees damaging morale and organisational culture. Conversely cost optimisation encourages collaboration and empowers employees to identify areas for improvement—aligning the workforce with the organisation’s strategic goals. Effective people management can further empower teams and align them with the organisation’s strategic goals. Personnel management is crucial in aligning the workforce with strategic goals, ensuring that the right personnel are in place to drive the organisation forward.
- Long-Term Sustainability
Short term budget fixes lead to long term pain. Optimisation strategies take a view of the business as a system so today’s cost savings won’t cripple tomorrow’s opportunities or efficiency.
Leadership’s Role in Cost Optimisation
Leadership plays a critical role in cost optimisation. The President’s commitment to government efficiency is evident in the establishment of the DOGE. The DOGE team lead and members are responsible for implementing the President’s DOGE agenda, but so far this is not driven by value based decision making but by a lash and burn approach to reduce costs. The demands to see immediate results has also resulted in many inaccurate savings being reported, many of which are so poor that any respecting CFO would have thrown them out. An $8b typo and triple counting the USAID savings are just two examples (https://www.npr.org/2025/03/01/nx-s1-5313853/doge-savings-receipts-musk-trump)
Effective leadership is essential in driving cost reduction initiatives and ensuring that they are aligned with the organization’s goals and objectives. Leaders must not only set the vision but also engage and empower their teams to identify and eliminate inefficiencies. This top-down commitment to cost optimisation ensures that initiatives are sustainable and impactful. But it takes time, sustained focus and sustained leadership-
Cost Optimisation is a Cultural Shift for Federal Agencies, Not a Consultancy Handout
One critical mistake many businesses make is treating cost optimisation as a one off exercise. They bring in consultants to ‘fix’ inefficiencies, write a report and expect transformation to happen by itself.
True, sustainable cost optimisation is not done in isolation—it thrives as a cultural change within an organisation. DOGE team members should play a crucial role in implementing some change, navigating internal dynamics and overcoming challenges to align the workforce with the President’s DOGE agenda. But the team needs time, they need skills and it wont be delivered armed with a laptop and a balance sheet. Leaders and teams must align on the principle that reducing waste and creating value is a collective ongoing responsibility.
Our work with Aramex shows just how powerful embedding these principles into the organisation’s DNA can be. Beyond immediate savings these strategies instilled a mindset of continuous improvement. Employees at every level were trained to challenge processes and ensure the value driven efficiencies became self perpetuating.
Measuring Success in Cost Optimisation
Measuring the success of cost optimisation initiatives is key to making them work. For our clients, success can be measured by tracking key performance indicators (KPIs) such as cost savings, process efficiency, and customer satisfaction. By regularly monitoring and evaluating these KPIs, we can identify areas for improvement and make data-driven decisions to optimise operations.
Best Practices for Cost Optimisation
To achieve successful cost optimisation organisations should adopt best practices that promote efficiency, transparency and accountability. Some of these best practices include:
- Fostering a culture of continuous improvement and innovation
- Adopting a value-add mindset always trying to drive value for end customers and internal customers
- Leveraging process mapping and technology to streamline processes and reduce waste
- Encouraging collaboration and knowledge-sharing across departments and agencies
- Be smart with Lean Accounting and look at more than just the baseline accounting numbers.
By adopting these best practices organisations can achieve significant cost savings and improve overall efficiency and productivity.
Cost optimisation is critical in the federal government to ensure taxpayer dollars are used effectively and efficiently. Initiatives like DOGE could reduce waste, improve efficiency, and provide better services to citizens by focusing on cost optimisation rather than cost cutting. But they could be internal iniatiives run by the federal government with oversight. However, it takes time that neither Trump nor Musk has—or so it appears.
Why Doge and Other Cost-Cutting Exercises Fall Short
The difference between cost-cutting and organisations adopting cost-optimisation strategies couldn’t be clearer when we look at DOGE (Twitter/X). Musk’s brutal Chop-and-Run approach at DOGE may please short-term voters, but it’s destroying long-term capability, trust, and operational reliability.
And here’s the hard truth—if you’re cutting costs blindly you’re not fixing the problem. You’re just delaying the inevitable. Imagine optimising a process so that greater capacity is created to allow the team to do more with less. Excess capacity can then be redeployed to struggling areas or trimmed due to real value creation. If you just cut without the process optimisation, less people have to work harder to follow the same poor process. Lead times increase, delays increase costs, people get burnt out and issues begin to spiral.
Streamlining operational processes reduces unnecessary overheads while strengthening the very heart of the value proposition. However, instead, leadership has chosen the easy option—at the expense of real long-term progress.
The Call to Action
Leaders today must choose cost optimisation for resilience, scalability, and sustained success. The choice is clear: Will you recklessly reduce your potential or unlock it?
The launch of the DOGE reminds us of what happens when a pure cost-cutting exercise is conducted; the real damage is yet to be seen.
At Leanscape, we empower forward-thinking businesses to adopt cost optimisation strategies that deliver immediate savings and a platform for growth. Our tailored transformation programs go beyond the easy answers and embed a culture of continuous improvement and value creation within your organisation.
Don’t follow DOGE´s example. Instead, follow a better strategy. Contact Leanscape today to find out how. It’s time to stop cutting costs and start optimising for success.
