A strategic approach to overhead management

Josh Lee; Margaret Covell

doi:10.1108/10878570810858202

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Strategy & Leadership

ISSN: 1087-8572
Incorporates: The Antidote

Online from: 1975

Subject Area: Strategy

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A strategic approach to overhead management

Document Information:
Title:	A strategic approach to overhead management
Author(s):	Josh Lee, (Partner of Monitor Group and the leader of its Adaptive OverheadTM practice (josh_lee@monitor.com)), Margaret Covell, (Formerly a Partner of Monitor Group, was a pioneer of the firm's overhead management methodology.(www.adaptiveoverhead.com))
Citation:	Josh Lee, Margaret Covell, (2008) "A strategic approach to overhead management", Strategy & Leadership, Vol. 36 Iss: 2, pp.40 - 46
Keywords:	Corporate strategy, Fund management, Overhead costs
Article type:	Conceptual paper
DOI:	10.1108/10878570810858202 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Abstract:	Purpose of this paper – The average company spends 23 cents out of every dollar of revenue on overhead, yet most firms lack a plan or system for aligning the with their strategic goals. This paper aims to look at a strategic approach to overhead management. Design/methodology/approach – The paper reframes how overhead can be categorized and assessed. Findings – The paper finds that viewing overhead as an investment in a capability is the key to preventing wasteful stop-and-start cost-cutting initiatives. Practical implications – The paper presents a way to protect the critical capabilities of organizations that are likely to be at risk during cost-cutting initiatives. Originality/value – The paper offers a new framework for classifying what is spent on overhead and for evaluating the strategic logic of it, so that management can instill a new discipline to managing overhead.