How to Apply "Zero-Based Thinking"
to Decision-making

D. Verne Morland

Published in AMA Forum

"Aristotle taught that terrestrial laws of physics do not apply in the celestial realm and Ptolemy showed that the sun and the planets revolve around the earth. Fortunately, Copernicus re-examined and discarded these 'known facts.'"

If we lived in a world where nothing ever changed, we could use proven formulas to achieve success and provide a sure foundation for future growth. But in the rapidly changing world we live in, shouldn't we systematically reconsider our approach to management problems, starting at the bottom?

Zero-based budgeting was developed in response to the threat of inflated budgets-based on historical precedents, not current needs. Department heads took their actual outlays for the current year for granted, and justified their new budget requests only by demonstrating the need for funding increases. This appears efficient, since no one wastes time describing obvious needs. However, as time passes, needs change, and gross discrepancies arise between budgets and fiscal reality.

Zero-based budgeting advocates periodic reviews of all "obvious" costs for the current year. Budgets are developed, substantiated, and authorized point by point, starting at zero. In many cases, those obvious costs prove to be not so obvious after all.

I believe the same principle could and should be applied to solving other problems with at least equal success. Too often, even when we think we are starting at the beginning in analyzing complex problems, we accept old, familiar "facts of life" that could be a more tractable part of the problem than we realize.

How many of the "facts" that you deal with each day are unalterably true?

Obviously, to approach every problem with a mental clean slate would be to ignore the benefits of education and experience. But what about those obstinate problems that seem to resist such conventional attacks of reason? This is where innovative leadership can win the day.

I suggest that managers adopt Zero Based Thinking (ZBT). This means that you suspend critical judgment just long enough to seriously entertain some unlikely, unpopular, unusual, but not impossible alternatives. ZBT can be useful not only for approaching problems, but for generating new ideas, such as "How can we more effectively employ our line managers?" or "How can we diversify our markets?"

Time consuming? Yes, usually. Really necessary? Absolutely!

There are many ways to get back to basics, and, in that sense, ZBT is more an attitude than a step-by-step method. However, some mechanical exercises can help you identify and reassess assumptions that you may not even be aware of:

  • Enumerate the obvious. Write down all the "known factors" related to the problem, but are not part of the solution.

  • Review this list and for each point try to envision at least one scenario in which a change would simplify or eliminate the difficulty.

  • Call in a novice. It's been said that "the young are often ready to give to those who are older the benefit of their inexperience." Someone who is unfamiliar with a problem may also be unencumbered by the blinders of success. Simply discussing a difficult problem with your spouse can often give you some fresh insight.

  • Listen for explicit assumptions. Whenever you hear a colleague say, "But, of course, J. P. would never stand for it," ask yourself when was the last time anyone asked J. P. about it. Collect these assumptions and subject them to the same objective scrutiny you give your own.

  • Apply ZBT to other creativity techniques. Begin a brainstorming session by suggesting that participants identify and discuss all the fixed or favorable sides of an issue, before tackling what seems to be the core of the problem. You may be surprised to discover a solution before you've had a chance to wrestle with the real problem.

D. Verne Morland is a consultant with Computer Sciences International based in Munich, West Germany, specializing in technical and administrative methods.