Organisational transformation is nothing new, but often those transformations are simply modifications on what’s always been done. Times have changed. Today’s disruptive business environment requires a new way of thinking―and doing―if firms are to be profitable in the future.

It’s estimated that over the next ten years, approximately half of S&P 500 companies will be replaced. This means organisational models must also change to be agile and able to quickly respond, in the right way, to changing customer needs and market forces if firms are to remain in business. That responsiveness requires an entirely new approach to how firms are structured.

Zero-based thinking―a new approach

Zero-based thinking (ZBx) is a new way of evaluating organisational effectiveness by stripping away the current structure and operating model to create (borrowing a term from the accounting function) a “clean sheet” upon which to design an agile an adaptable structure. A zero-based organisation (ZBO) adopts only those processes that have a significant impact on growth and profitability. In other words, employees only do work that matters. The ZBx approach is driven by a pervasive focus on the customer.

ZBx champions a culture of accountability in which every person owns their responsibilities and participates in eliminating non-value-add tasks in favour of work that furthers organisational goals. Transparency at all levels of the organisation is a critical success factor―and ZBx behaviour must be modeled from the top.

It’s all about value

All too often financial services firms have organisational structures in which too many people are performing work that’s not creating value for the organisation. These firms will be left behind unless they adopt a new way of getting things done. In this three-part blog series, I’m going to examine how the ZBO model can help firms design for growth and profitability. In my next post, I’ll provide details about the “five rights” of ZBOs as context for creating a new operating model.

For more information about the zero-based organisation, please see the Accenture report, Zeroing Out the Past.

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