Here is an excerpt from an article written by Paul Leinwand and Vinay Couto for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

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We’ve all been through it — the looming cost project. And for many of us, it’s not a fond memory.

How many cost-cutting initiatives have our companies gone through in the last dozen years? More important, do we look back on those initiatives as transformative in helping us build success and leading us to growth?

For executives at most large organizations, the answer to the first question is probably “too many,” and the answer to the second is “no.” Call it cost management fatigue. When doing research for our book, we found that the main reasons most companies suffer from this syndrome are that they make across-the-board cuts that are unconnected to their strategy, and fail to make the cuts sustainable. Most organizations wait to act until they have a problem, at which point they don’t have the time to make the right trade-offs for the long term.

The best-run companies, in contrast, think of cost management as a way to support their strategy, and of cost as precious investment that will fuel their growth. They put their money where their strategy is and continually cut bad costs and redirect resources toward good costs. After all, if we aren’t directing spending to the right places, what chance do we have to grow?

Management teams at such companies spend a lot of effort separating out the costs that truly fuel their distinct advantage from the ones that don’t. They base their decisions about where to cut and where to invest on the need to support their greatest strengths: the capabilities that enable them to create unique value for customers. This important distinction is a way of life at leading companies we have studied, like Amazon, CEMEX, Frito-Lay, Ikea, Lego, and Starbucks. They cut costs to grow stronger.

You can see this different approach to cost allocation at work in the way winning companies behave in times of adversity. When Roger Enrico took the helm as CEO of Frito-Lay, in 1991, the company was developing an innovative and distinctive approach to direct-store delivery that would allow it to consistently deliver the right products to the right stores at the right time. At the same time, Eagle Snacks was gaining market share with innovative new products and its own distribution system. Enrico realized that Frito-Lay had to make a major investment in product quality to meet the competitive threat. He resolved to start by cutting $100 million — 40% — in general and administrative costs. This was painful, including laying off 1,800 managerial and professional people in a single day. But the action removed layers of management and many unnecessary practices, leading to a much higher level of responsiveness and effectiveness, and freed up money to invest in Frito-Lay’s distinctive capabilities — including not only the direct-store delivery capability, but also product and manufacturing innovation, and consumer marketing. Today, Frito-Lay “owns the streets” in its markets, as well as several $1 billion brands.

Five big mindset shifts can help you and your organization manage costs in the right way. First, connect costs and strategy. Look at every opportunity to cut costs as an opportunity to channel investments toward strengthening your value proposition. (3) Connect your budget directly to your strategic priorities; if your budget doesn’t reflect your priorities, you have very little chance of executing your vision. This entails viewing costs not merely as an in-year expense but also as a multiyear investment in differentiating capabilities designed to help your company execute its strategy.

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Here is a direct link to the complete article.

Paul Leinwand is Global Managing Director, Capabilities-Driven Strategy and Growth, with Strategy&, PwC’s strategy consulting business. He is a principal with PwC US. He is also the coauthor of several books, including Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap (HBR Press, 2016).

Vinay Couto is a recognized thought leader with PwC’s Strategy& in the people and organization strategy practice. He is a principal with PwC US and a leader of the global Fit for Growth platform. He is the co-author of Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal (Wiley, 2017).