It is impossible to lead any team successfully without a clear handle on the costs it is incurring. Whether you are leading a P&L, a cost centre or a project you will be held accountable for the costs you are responsible for and will be expected to understand what is driving them, what the current position is, what likely future trends there are and what actions you will take if cost savings are required. It is also quite likely that you will be working in a tough competitive environment where ongoing, not to say continuous, cost reduction is a way of life.

At the very least this is going to demand from you:

• a clear understanding of how cost ‘works’; and the different ways it manifests itself in your business;
• a framework for managing this cost;
• a basic set of strategies for the many possibly varied and complex set of suppliers your business engages with.

This is not to suggest that you need to be an accountant; rather that successful leaders develop a strong all-round financial literacy which enables them to manage cost proactively and effectively.