In a world of constant change and disruption, companies need to review their strategies and operating models to stay ahead of the competition. Traditional approaches to cost management, such as benchmarking and incremental cuts, are no longer sufficient to achieve sustainable profitable growth. Therefore, companies must adopt the "base zero" (ZBM) philosophy, which means starting from scratch and establishing what their costs should be, according to the results they want.
Organizations should plan that the core of the zero-based culture is difficult for many people to break. The idea of being completely open to reviewing budgets, business models, and processes already in place is unsettling to people who are used to protecting themselves by hiding in their departments and in budget lines that no one examines. Revealing these habits, and then committing to aggressive cost and value targets, can seem daunting at first.
ZBM (Zero Based Mindset) It is not just about cutting costs, but also about transforming costs holistically and strategically. It involves reinterpreting all aspects of the business, from organization structure and talent allocation to customer value proposition and spend visibility. ZBM helps companies align their resources with their goals, invest in areas that stimulate growth and innovation, and create a culture of continuous improvement and accountability.
ZBM challenges a company's strategic ambition, choices, and distinct capabilities without the biases of the past. Think of it as a starting point in defining what a company will and will not do from here on out, as well as what it will do differently. Staying relevant means developing a strategy for growth and quickly realigning to a more agile and efficient organization.
The ZBM consists of four key elements:
ZBO - Zero Based Organization - ZBO enables companies to redesign the organization from a blank slate, moving their talent into jobs aligned to their capabilities, transforming the current operating model, and focusing on the results needed for long-term growth. ZBO requires organizations to abandon traditional work mindsets, and think of new ways to do the same processes or even create new ones if necessary. ZBO also leverages a fluid ecosystem of fixed and variable human labor, robots, virtual and cognitive agents, talent crowdsourcing, customers, and suppliers.
ZBCE - Zero Based Costumer Economics: ZBCE helps companies identify their most strategic and profitable products, services, channels, and customers, optimize their value chain, and enable companies to deliver superior customer experiences, increase loyalty, retention, and provide new market opportunities.
ZBS Zero Based Spend: ZBS gives companies forensic visibility into every expense item, and helps them eliminate waste and inefficiency. ZBS frees up resources that can be put toward new growth initiatives. ZBS also fosters a culture of cost awareness and ownership throughout the team.
ZBSC - Zero Based Supply Chain: ZBSC helps companies optimize their end-to-end supply chain operations, i.e. from sourcing and procurement to manufacturing and distribution. ZBSC enables companies to reduce costs, improve quality, increase agility, and mitigate their risks.
ZBM is not a one-time exercise or a quick fix. It is a new way of thinking and working that requires commitment from top leadership and involvement from all levels of the organization. ZBM can help companies achieve transformative results that go far beyond cost reduction. Companies that adopt ZB can expect an average 5% increase in revenue, 10% increase in EBITDA growth, 15% increase in net income, and 60% increase in total shareholder returns.
If you want to learn more about how ZBM can help your business thrive in the digital age, contact us at (11) 93011-1501 or via e-mailcomercial@valini.com.br
Luis Valini