You might have heard of zero-based budgeting. It's true, the idea behind the term did originate to help businesses become wiser with their spending. However, as with many good ideas, the concept has now shown how effective it is when applied to other arenas. So what is zero-based design, and can it help you get the most out of your digital transformation?
What is the zero-based approach?
Think deep visibility. The zero-based approach is all about focusing on the future of your company, understanding its core functions, and creating alignment. Often this will require a shift in the culture of your business to achieve, however, the rewards are great.
Two terms sit at the centre of the methodology.
North star - This is the clearly defined, visible, and understood aim of your company. It's your compass in every future move you make, and it's visionary. Figuring out your shining north star is a vital step in the zero-based approach if you want your efforts to lead somewhere.
Zero point - More than just a blank slate, the zero point is where your business is stripped down to its core. Only essentials should remain. What could your company not function without? If you were to start over, look at the processes, systems, and products you'd keep even when scrapping everything else.
A zero-based design means taking an in-depth look at what your company is now and reviewing it with your north star in mind. Instead of forecasting and looking at where incremental changes may take you in the future, the approach works on a system of back-casting. With your visionary aim as the starting point, you re-evaluate your processes and ask how you can change them to connect you to your north star.
How the zero-based approach can help your digital transformation
A north star for your digital transformation can reveal the ideal state your business could achieve with it, without any pre-conceived notions or biases limiting you. Additionally, with the zero point identified you can choose to siphon time and effort from the non-essential elements into your digital transformation.
Your zero-based approach should cover five areas:
Each of these ties well into creating a digital transformation that's successful. Making plans and changes visible and accessible to all employees helps bring them on board. A zero-based approach should have strong top-down targets that are regularly reviewed and monitored. This ownership by management of your digital transformation, along with active checkups, helps ensure that it progresses smoothly.
Governance should include deadlines and tension to help push the transformation along, rather than letting it flounder and grow stale.
Developing the right mind-set is also vital, as it switches views from focusing on the negative to seeing how things are changing for the better. For example, a question you might like to ask is: 'How might we better utilise our employees by engaging them fully in tasks that foster their talents and bring innovative ideas to the table, rather than have their time consumed with repetitive, mindless work?'.
Incentives that are intrinsically linked with the steps needed to achieve your digital transformation's north star encourage individuals to work towards the aims.
The zero-based approach, when fully invested in and implemented correctly, is a great change agent. It can help your business move into the digital age. Additionally, the methodology fits well with an agile structure.
If you'd like to learn more about how to successfully manage a digital transformation within your company, contact the team at XLdigital today. We can help you achieve your technological north star.