These early days of the new decade are the perfect point to consider practicing the concept of "leading from zero." Perhaps a more familiar strategy is zero-based budgeting -- the approach where each new budget cycle starts from a baseline of zero assumed recurring expenses. No incremental expense increase over the prior period. Every dollar invested for existing or new activities stands on its own, justified in the current time period, not the past. The objective of zero-based budgeting is to assure manager accountability for expenses and activities they fund to create value for the organization.
Leading from zero is grounded in a similar principle. Every organization starts its day from a base of zero. Zero customers. Zero employees. Zero revenue.
Leaders must influence their organizations and earn relevance with customers, employees and other stakeholders daily. Organizations have no entitlement to customers, employees or revenue. They recognize customers and employees have free will and will only engage with an organization if its mission is relevant, its value proposition is clear and it continually delivers on both the mission and value proposition. Contracts exist, but in the long run, all agents (vendors, contractors, suppliers) are free agents.
Leading from zero assumes
- Competition for the most valuable resources -- human, intellectual, physical, economic, noneconomic -- is strong and will remain so into the foreseeable future
- Barriers to entry in most industries are malleable or nonexistent. Therefore, the potential for new competitors is high
- Competitive advantages are temporary at best
- Pricing pressure is constant, coupled with an expectation of providing more to customers at lower prices
These assumptions place leaders in a position that requires a new paradigm for how they view their roles and further their organizations. This paradigm says that an organization must:
- Differentiate itself as a resource development exemplar
- Practice self-initiated disruption
- Exhibit an obsession for continually adding greater value
- Consistently demonstrate efficiency gains in operations
Each of these pillars represent ongoing processes, not one-time events or special projects. A leading from zero mindset informs the organization that effective execution of these processes earns relevance with customers, employees and stakeholders daily. Failure to re-earn relevance over time opens an organization to suboptimal access to the best resources, weakness relative to competition and poor economic performance.
Leading from zero actions you can take now:
- Identify one resource area to focus upon for developing a differentiation strategy. If you chose HR, you might begin with developing an employee value proposition that authentically answers the question “why work at this company?” With the statement drafted, strategy work may include review of employee development resources, career-pathing tools, position descriptions and recruiting practices to assure alignment with the spirit of the value proposition. The goal: Take a first step in the process of differentiating your company as a resource development exemplar.
- Identify one opportunity for self-disruption. Look for candidates by examining processes, products and your customer engagement approach for a candid assessment of elevated exposure to external competitive threats. The goal: Take a first step in the process of proactively identifying and addressing vulnerabilities in processes, products or customer engagement approach.
- Identify one upgrade or enhancement you can offer customers this year. A prerequisite for this action is understanding where customer expectations are shifting in order to preemptively address demand. The goal: Take a first step in the process of creating greater value for your customers by assuring you will meet their future needs.
These actions are a starting point in operationalizing the leading from zero paradigm. The benefit to your organization is earning greater relevance from the perspective of your customers, employees and other stakeholders.
Dave Coffaro is a strategic advisor, executive coach and author. His areas of expertise include leading organizations in the process of strategy development and execution, change leadership, organization transformation and innovation. Coffaro is principal of the Strategic Advisory Consulting Group, a management consultancy, and co-founder of Atticus, a fintech firm providing individuals and professional advisors with easy to use, do-it-yourself tools for fiduciary-based activities. His new book is "Leading from Where You Are" (January 2020). For more information, visit Coffaro's website.