ZBx? Get serious (about culture change)
March 26, 2018
March 26, 2018
It’s a rare business management phenomenon that yields the kind of wild success of “zero-based budgeting,” or “ZBB.” Accenture Strategy research has found that, since 2013, ZBB has exponentially grown by 57 percent every year.1 More recently, companies have realized that a zero-based approach—optimizing spending not by a certain annual percentage, but by looking at what things should cost from a blank slate—can be applied to other areas of the business: supply chain, the front office and the organization itself. Thus was born the concept of what Accenture calls “ZBx”—a holistic, zero-based mindset whereby companies take out non-working money that doesn’t efficiently support the business strategy and funnel the savings back into growth initiatives.
ZBx isn’t necessarily an easy path, however. On the one hand, companies are finding that ZBx can impact many cost categories. According to our research, high numbers of companies—92 percent—focus first on G&A spend,2 but ZBx broadens that perspective to include sales and marketing, cost of goods sold, and direct and indirect labor.
On the other hand, it can be a challenge to create a culture that delivers more than just one-off savings and instead sustains a zero-based mindset over time. Asked about the biggest obstacles to ZBx success, the top-two answers in our Accenture Strategy study were “culture” and “change management.”3 Success with ZBx involves zero-basing the culture too, creating a fresh value system across the company where all employees treat every dollar as if it were their own and make decisions accordingly.
Most companies are aware of a few core principles about culture change:
Beyond these well-known organizational change objectives, let’s look “under the hood” at six key levers leaders can pull to embed culture change in ZBx programs.
Unlike traditional cost-cutting programs, ZBx is more than an exercise that gets completed and is then simply admired. It’s about thinking and doing things in new ways, and that requires culture change. “Culture” has often been defined as “the way we do things around here.” But more accurately, especially with strategic initiatives like ZBx, culture is about enabling “the way things should be done around here.”
1 Accenture Strategy, ”Beyond the ZBB Buzz”, 2018
2 Ibid
3 Ibid
4 Ibid