Other parts of this series:
According to Accenture research, there’s a critical need for firms to adopt a more agile and adaptive business model if they plan to remain competitive in today’s volatile business environment. The research indicates that 82% of companies are focused on freeing up funds to invest in growth initiatives, but only 25% of executives believe their company’s operating model has evolved quickly enough to align to their growth strategy. Accenture’s most recent study on enterprise agility provides even deeper insights into the forces that affect organisational agility.
In my previous post, I explained that zero-based organisations (ZBOs) are centred on the idea that employees should only perform the work that really matters―work that furthers organisational goals in the most efficient way and for the greatest benefit. Borrowing a term from the accounting function, ZBOs take a clean-sheet approach to creating an organisational structure that fulfills this objective―offering a model that can help firms align structure to strategy. In this post, I’m going to share the “five rights” of ZBOs to set the context for creating a clean-sheet structure―which I’ll talk about in my final post.
The five rights of ZBOs
ZBOs are designed based on the following five rights:
- Right work―The only work that should be performed is that which drives the greatest business value. Non-value-add work can be identified and eliminated through a close examination of key routines and projects, with a focus on reducing any unnecessary complexity or wasted investment.
- Right size―Once a firm has identified the time, effort, and frequency of work required to achieve strategic objectives, it can streamline and aggregate its workforce based on routines and projects―leveraging digital technologies and sourcing strategy where it makes the most sense to do so.
- Right structure―Inflexible and hierarchical structures have no place in a ZBO. The goal is to create a fluid, project-based structure that balances spans of control, focuses on core competencies, and clarifies roles and responsibilities.
- Right people―Every employee in every function at every level must be evaluated to make sure skills align to roles of today and there’s a good cultural fit between employees and the new model. There is also a need to make sure they have the abilities to be flexible and upskill in new areas as the roles they have today are likely to change in the future.
- Right measures―Transparency is key in a ZBO. Organisational and personal objectives must be established, shared openly, and aligned with business functions. Personal accountability and a sense of ownership underpin a ZBO’s success, enabling frontline decisions that result in greater agility.
Other things to think about
The adaptive workforce and digital technologies are significant ZBO enablers. Boundaryless organisations that leverage talent from a variety of sources based on fluctuating needs, and that take advantage of digital technologies that help people do their jobs, align perfectly with the ZBO model. Accenture’s research indicates executives increasingly believe both of these capabilities will gain significant traction in the workplace over the next few years. In my next post, I’ll explain how HR professionals, together with their leadership teams, can apply ZBO principles to their firm’s organisational structure.
For more information about the zero-based organisation, please see the Accenture report, Zeroing Out the Past.