Zero-Based Redesign: When Budget Cuts Aren’t Enough

Zero-based budgeting is the darling of cost-cutting playbooks. Start from scratch. Justify every dollar. CFOs love it. Boards love it.

But here’s what we’re hearing in conversations with strategy and transformation leads: the real unlock isn’t just zero-basing the numbers. It’s zero-basing the operating model itself.

Because cutting line items saves money once. Redesigning how work actually gets done frees capacity forever.

The Hidden Waste in Plain Sight

When we asked one Fortune 100 CSO what they found after running a zero-based redesign, the answer was blunt: “Half our meetings didn’t need to exist.”

Layers of approvals, duplicated reporting, legacy processes that nobody remembered why they started, these are the invisible anchors. They don’t show up in a budget line. They show up in slow decisions, frustrated talent, and opportunities that die waiting.

This is why leaders are moving beyond zero-based budgeting. They’re running zero-based org design. Every role, every process, every handoff gets put on trial. If it doesn’t create value, it doesn’t survive.

The Playbook: How Execs Are Doing It

From our conversations, a few tactics stand out:

• Map the work, not the org chart. One CSO described running “shadow org mapping.” Instead of asking departments what they do, they tracked actual workflows end-to-end. The picture that emerged showed 30% of effort was duplicative.
  

• Interrogate decision rights. Another exec shared how they forced every leader to answer a single question: “What decisions do you own, and what decisions should you?” The result? Fewer handoffs, faster cycles, and clearer accountability.
  

• Design for future, not legacy. A transformation leader in Europe said it best: “If we rebuilt this company tomorrow for digital-first, would we design it this way?” The answer was no. So they rebuilt around digital flows, not legacy hierarchies.
  

• Free capacity for growth. The real win isn’t cost savings, it’s repurposing talent. One retail exec cut 15% of redundant process work and redirected those teams into experimentation pods. “We didn’t shrink,” they said. “We reinvested.”
  

The Trap: Mistaking Cuts for Design

There’s risk here too. If leaders treat zero-based redesign like zero-based budgeting, a cost-cutting exercise only, they miss the point. One COO told us: “We saved millions on paper, but killed our innovation pipeline because we cut too deep into capability.”

That’s why the best implementations don’t run from finance alone. They run from strategy, with finance, ops, and HR at the table. The aim isn’t smaller. It’s sharper.

The Hard Truth

Budget cuts make headlines. Operating model redesign makes impact.

It’s slower. It’s messier. And it forces uncomfortable questions about who really adds value. But the leaders we spoke to were clear: the payoff is bigger. Cost savings are nice. Capacity creation is better.

Zero-based budgeting trims fat. Zero-based redesign builds muscle.

TL;DR Zero-based budgeting is yesterday’s playbook. The real game is zero-basing the operating model; rebuild processes and roles from scratch, cut invisible drag, and free talent to innovate.