A zero-based mindset (ZBx) helps enterprises envision and enact a long-term, durable strategy that boosts growth, profitability, sustainability, and trust. More holistic than any one-off cost intervention, ZBx provides forensic insight into spending across the organization—from the front office to the supply chain and everywhere in between—to help companies recognize where to double down and make capital work harder, by investing in areas of the business that can boost agility and resilience.
Rather than assuming historical models will hold up in the face of ongoing disruption, ZBx is a forward-looking approach that establishes what costs “should be” instead of basing future spending on past introspection. When companies consistently build their costs from zero across the whole enterprise (not just across top-line budgets), they can uncover the inefficient resources that are not contributing to the business strategy and then reinvest those savings into key growth initiatives. The visibility that ZBx provides can optimize processes and procedures, boost organizational agility, promote a culture of excellence, and ultimately secure competitive sustainability.
“A ZERO–BASED MINDSET HELPS ENTERPRISES ENVISION AND ENACT A LONG–TERM, DURABLE STRATEGY THAT BOOSTS GROWTH, PROFITABILITY, SUSTAINABILITY, AND TRUST.”
Companies are under immense pressure to identify new business opportunities in the form of international expansion, added brand-building activities, and new products and services—and the companies that have adopted ZBx have uncovered the funds to drive these growth initiatives. For instance, a global food company partnered with Accenture to implement a global supply chain, finance, human resources, and IT management platform that will save the firm $100 million annually. Original equipment manufacturers (OEMs) are also using a zero-based commercial to optimize marketing strategies and a zero-based supply chain (ZBSC) to drive down the cost of goods sold (COGS). By improving inventory management models—as a large electronics control board manufacturer who now uses computerized models recently did—businesses can better determine retail prices for their goods.
For companies that adopt a zero-based mindset, the results speak for themselves. According to research from Accenture Strategy, companies who adopt zero-based strategies are seeing average cost reductions of 15 percent and bottom-line savings of more than $260 million annually. Moreover, 91 percent of companies using ZBx have met or exceeded their financial goals, and they are reinvesting those funds into key growth-driving initiatives, such as digital programs, acquisitions, research and development, or bottom-line expansion. These success rates have fueled a 57 percent exponential growth in adoption per year from 2011 until today—proof that companies recognize ZBx as an invaluable leadership tool that allows organizations to better allocate resources and align strategic priorities to drive winning results.
“ZBx IS A FORWARD–LOOKING APPROACH THAT ESTABLISHES WHAT COSTS “SHOULD BE” INSTEAD OF BASING FUTURE SPENDING ON PAST INTROSPECTION.”
Given its broad scope and impact, a zero-based mindset requires a complete cultural shift that gets the entire organization engaged, excited, and motivated to move to ZBx. The key to success is an organization’s ability to empower its people to shift to a zero-based mindset by helping them understand that they are steering the destiny of the company’s growth. Employees gain an ownership mentality when they can see how the savings they create are channeled back into the organization. Therefore, a culture of transparency and accountability must be at the core of the holistic ZBx strategy, because it encourages a shared sense of the growth mission at hand. In effect, a workforce that adopts the ZBx mindset begins to treat the company’s money as their own, and in turn makes smarter decisions that work toward the greater long-term good of the enterprise.
By adopting a zero-based mindset, companies gain all of the insights and capabilities they need to regularly build and rewrite the blueprint for tomorrow’s success. As companies face industry upheavals and threats to market share, the ones that ingrain a zero-based mindset into the DNA of their organization will be best positioned to accelerate growth strategies, pivot to new digital business models, and boost competitive agility.