Other parts of this series:
Zero-based organisations (ZBOs) have a competitive edge because they are structured to perform only the tasks that have a meaningful impact on growth and profitability. In my previous post, I explained the five rights that must be addressed when designing a ZBO. In this post, I’m going to touch on critical success factors and provide guidelines on how HR professionals and their firms’ leaders can work together to transform their organisations.
Critical success factors
The following key factors act as foundational principles in designing a ZBO:
- Organisational identity―Each firm will have to do some serious self-examination to create the right operating model to fit its unique strategic objectives. Leaders must take an honest look at what their firm will and will not do, and what changes must be made to achieve the company vision. This is an ongoing process of achieving excellence at what is routine for the firm while developing the agility to innovate quickly to keep customers happy and stay ahead of the competition.
- Controlling your own destiny―Once a firm has developed a strategy, the next step is to match the organisational structure to that strategy. A ZBO is designed by looking forward, not backward. Every line item must be clean-sheeted to open the opportunity for transformational rather than incremental savings. All decisions must take in to account the impact on workload volumes and demand.
The beauty of a ZBO is that it shifts talent and resources away from value-preserving and non-differentiating capabilities and toward those distinctive capabilities that can propel a business forward.
Start with a clean sheet
Designing a ZBO begins with a willingness to start from scratch, or apply a clean-sheet approach to evaluating the organisational model. Here are the fundamentals of this approach:
- Be who you aspire to be―ZBO design is all about looking ahead, anticipating what market changes might come along, and having an open mind about how to create a strategy and organisational structure that can meet those future wants and needs.
- Design from the outside in―The customer (both internal and external) is the driving force behind ZBO design. Accenture analysis shows that 70% of the time consumed by company processes is not directly related to creating value. By looking at processes and tasks through the customer’s eyes, this non-value work can be eliminated―freeing up resources for work that does add value.
- Build it so they come― ZBOs are capable of turning all the levers that focus resources on driving a growth agenda. A ZBO is fine-tuned to deliver outcomes―and that’s a compelling proposition for customers and partners.
Designing for ongoing growth and profitability
The essence of designing a ZBO is abandoning a “this is how we’ve always done it” mindset and instead creating a new one, based on only doing work that truly adds value. This is the key to winning in the marketplace, well into the future.
For more information about the zero-based organisation, please see the Accenture report, Zeroing Out the Past.