Monaf found that "successful slimming" companies tailor zero-based budget projects based on their organizational culture. First, determine the scope of the project based on the expected transformation intensity and organizational readiness. Second, clarify which elements should be centrally managed to ensure that the global cost category leader strikes an appropriate balance in cooperation with the budget leader. Finally, the leader decides the degree of refinement and visualization of the incentive mechanism and budget. In this process, the company does not need to make full use of its horsepower and achieve the goal in one step, but can gradually build capabilities and gradually accelerate the process. Here, we summarize the four rules that companies that successfully use zero-based budgeting follow:1. Become the top priority of the management team

 

Leaders should clarify the ambitious mission and clarify the necessity of transformation. Before starting a zero-based budgeting project, the leadership team must obtain recognition and strong support from all levels of the organization, and executives such as the CEO and CFO should make everyone understand that zero-based budgeting is not a simple cost-cutting tool, but a brand new way of changing spending Cost management methods to establish a high-performance corporate culture.           2.Distinguish between strategic costs and non-strategic costs    Many managers believe that zero-based budgeting is a one-size-fits-all approach to all costs. In fact, this is a wrong idea and should not be used as a starting point. The ultimate goal of zero-based budgeting is not to cut expenses, but to re-allocate funds and focus on high-return investments. 3Promote growth by saving

 

Companies often overlook the important strategic role of zero-based budgeting: reinvesting cost savings in key areas to drive future growth. This will stimulate employee engagement and ownership, and help ensure the smooth implementation of zero-based budget projects. In fact, a complete zero-based budget project can simplify the organization, simplify the organizational structure, reduce cumbersome processes, allow employees to complete their work better, and release the constraints of high-performance personnel. 4Paving the way for behavior change

 

Even if a company has formulated an effective zero-based budget project, it often finds itself in trouble due to poor execution. For example, some managers will place too much emphasis on the use of tools, benchmarking analysis, and rhythm control, and underestimate the training of employees on a new code of conduct. Bain recommends that leaders and front-line personnel use tools to change the way they manage costs. These tools can improve financial visibility. If the zero-based budget is simply viewed as a project that needs to be "executed", and the company focuses more on process rather than people and culture, then the results may be disappointing. Bain recommends that leaders correctly understand what zero-based budgeting is and not what it is from the beginning, and treat it as a brand-new ability-it can not only promote corporate culture changes, but also requires continuous investment and development by the leadership team to achieve Its greatest potential. There is a big difference between these two ways of thinking, and the latter can win the “triple color” of zero-based budgeting—increasing revenue, profit, and employee engagement.