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The X Factor: Competitive Agility

OVERVIEW

ZBx, or zero-based mindset, is a new way to look at profitability through four zero-based approaches.

The speed of change will never be as slow as it is today thanks to digital and other new technologies. To keep up, companies need to take out non-working money that doesn’t support the business strategy for future growth goals. ZBx, or zero-based mindset, is a new approach, more holistic than ZBB. It impacts profit, growth and sustainability and trust. Unleashing ZBx involves gaining forensic visibility into spending and funneling savings back into growth initiatives.

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KEY FINDINGS

ZBx is about improving agility by launching interventions in four areas:

Zero-based spend (ZBS) enables organizations to identify discretionary consumption of non-labor overhead expenses through a unique lens of granular cost visibility. This allows leadership to make the right choices to change the culture of the organization, ultimately freeing up cash that can funnel into growth initiatives, capability improvements and improving EBITDA.
Zero-based organization (ZBO) designs the organization from a clean sheet to shift talent from work that no longer contributes to desired outcomes to the distinctive capabilities required to win in the future.
Zero-based front office (ZBFO) optimizes marketing, sales, customer service, and pricing to deliver superior customer economics.
Zero-based supply chain (ZBSC) identifies the “should cost” of COGS and cost reduction opportunities across three levers: price, performance, and value engineering, while optimizing product and service complexity.

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RECOMMENDATIONS

Companies in the United States that want to boost their competitiveness need to:

Gain CEO commitment

To drive a ZBx mentality requires ownership by the CEO and the leadership team. They are responsible for driving and operationalizing ZBx on a daily basis.
Focus on the four

Zero-base and examine your should costs for everything from plant maintenance to customer marketing and sales. The cash can then be reinvested for growth.
Build a ZBx mindset

Hardwire ZBx into your company culture to create a sustained commitment to should-cost mentality. How? Create a structure for "category ownership" to ensure there are checks to keep the players honest.