INVESTMENT & ROI

A zero-based approach to all discretionary investments – operating and capital - can deliver a surge in performance

• Dissecting returns on investment, both historic and planned, is at the core of effective strategy and implementation
• Investments are not just a capital budgeting issue; they include operating decisions like how the marketing budget is applied to different segments, where the sales effort is targeted, how scarce management time and skills are allocated, and so on
• A zero-based approach has the added benefits of ensuring robust business cases and building management alignment behind a focused strategy

Examples:

The operating Board of a supermarket company was tracking fifty-six initiatives it had launched, but discovered that over twelve hundred initiatives had been launched over the previous eighteen months.

A telecommunications company found that over 80% of its discretionary effort was targeted at less than 30% of its growth opportunities.

A recently-appointed CEO, disappointed with progress, discovered that what was being reported as being done was only a fraction of what was actually being done, much of which was non-critical to corporate performance.