zero budget simplicity

Time. Should we zero-budget it?

Time is a precious resource, and yet it’s not given the same attention by organisations as money. There are lessons we can learn from zero-based budgeting to be fundamentally smarter about how organisations allocate time.


Refocusing resources matters

When our capital is tied up and it’s hard to raise more funds, we need to make every penny work harder. Obviously. But that shouldn’t mean cutting costs unilaterally, and instead should mean investing into the areas that will deliver growth (hopefully outlined by our strategy!).

While many rightly question the merits of zero-based budgeting, done in a smart and not overly bureaucratic way, it can help organisations refocus capital and operational costs to where they will deliver greatest returns. This approach has helped many organisations re-allocate their money better – with one study suggesting 40% more profits over 15 years1. Yet little has been done to re-focus an organisations time on the most value-adding activities.

You could argue that reallocation of headcount in the budgeting process does this. It allows a person’s time to be moved, for example, from working on product line A to product line B. But it doesn’t do anything to reallocate how that person – and everyone else in the team – spends their time working on product line B.

For example, an hour spent attending a weekly meeting that someone in your team is already attending may not be as valuable as having an hour of deep-thinking on your team’s most exciting opportunity.

Two things that help make zero-based budgeting useful are also crucial to helping you reallocate your organisation’s time – or capacity – effectively: visibility of how your organisation spends its time, and the ability to challenge why it does so.


Visibility of how time is spent

If you don’t know where you spend your money, it’s hard to know how good the return on your investment is. It’s the same for time. If you’re not aware of how you and your organisation spend your time, it’s hard to know how to use it better. Luckily, gone are the days of clipboards and time diaries – it’s now possible to automate that and allow an organisation to see how the average employee, teams and even whole organisations are spending their time2.

With visibility of how time is actually spent, individuals, teams and organisations can start to question why their current capacity is allocated the way it is.


Ability to challenge, to ask why

This can be hard, especially in organisations where there isn’t a strong culture of ‘challenging the status quo’. People can find it uncomfortable as it lays bare the fact that they and others have been investing their time in low-value activities.

Management may try to dictate a blanket cut of 10% for a certain activity. But that goes against the logic of allocating resources to where they will deliver the greatest return. Let’s take meetings as an example. While a 10% reduction may be good as a target (although pretty unambitious), it shouldn’t be applied to every meeting. There are some meetings that are excellent and may even need to be longer, while there are many that are in desperate need of an overhaul.

If the organisation’s strategy has shifted for example, it makes no sense to continue to have long meetings for projects or activities that won’t go towards delivering the key strategic priorities.

And if we don’t ask why we are spending time in those meetings, we’ll struggle to take positive action to cancel or improve them.  That said, rather than questioning every minute of every day (the purist’s approach to zero-basing), once we have visibility of how we are spending our time overall, we should challenge what we’re doing in the biggest chunks of our time budget.

If we try to challenge it all, we run the risk of creating a painful process for process sake.


Takeaway: Time is a precious resource. It cannot be wisely allocated by headcount moves alone. By understanding how our organisations spend their time – day in, day out – we can identify big opportunities for re-allocating capacity to the activities that will deliver our strategy.




1 How to put your money where your strategy is, McKinsey Quarterly, March 2012

2 Stop.’s approach to time diagnosis: This should not be a big brother snooping exercise on individuals. Rather, an anonymised, aggregated view of how time is spent. And in a way that doesn’t require time to be spent understanding how time is spent!