NO PAIN, NO GAIN
While most say the rewards are worth it, like any major transformation,
ZBB is not an easy fix. The top obstacles companies face are creating a
culture of adoption, change management and data visibility (see Figure
2). However, the hardest things to do are sometimes also the most
important. If you want ZBB to stick, focus on organizational culture and
change.
Companies today are investing in several different approaches to
evolve their cultures. Their change management initiatives include
widely accepted tactics like communication, training and workshops.
Targets, incentives and role modeling focus on changing behaviors
and are less common (see Figure 3).
Companies find that going deeper to influence behavioral changes can
be rewarding. Take, for instance, a leading Indian travel services
company. The chairman backed the program from the start and drove
implementation by aligning the KRAs of each of his business CEOs. Not
only were the results outstanding, a strong culture of costconsciousness was also cultivated. People across the company
started
to take ownership of the decisions made and carried out the
implementation as if it were their own decision.
By aligning incentives and investing in governance structures that
support a healthy tension between cost and budget owners,
companies are signaling their understanding of a fundamental tenet of
ZBB-that people are the linchpin. Unlike one-time, high-level
percentage cuts, ZBB is not a budgeting exercise that gets completed
once and is then forgotten. It is an act of culture, a mindset that
becomes so ingrained in how people think and work that they do it
naturally.
FIGURE 2: ZERO-BASED BUDGETING OBSTACLES
FIGURE 3: CHANGE MANAGEMENT INITIATIVES EMPLOYED IN ZBB
A SWEET PILL TO SWALLOW REINVENT TO DISRUPT ZERO IN ON PROFITS