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