Business Insight Zone

A new month is a good time for having a fresh look at things.

Pull out a fresh sheet of paper. Make a list of the projects and problems that are taking up your attention.

Now pretend that you’re an outside auditor, brought in to review your job (or your career or your department or your company — or, for that matter, your life). You-the-auditor are friendly, but you won’t put up with nonsense. So you start asking awkward questions:

“If we weren’t already doing it this way, would this be the way we’d choose to start doing it?”

“If we could afford only one of these options — regardless of what we’ve been doing so far — which one would it be? Which one would it certainly not be?”

“How does this item [project, technology, product, subsidiary, etc.] make us more profitable?”

“If Warren Buffett had just bought this company, how would you justify this expense to him?”

“If we wrote this software from scratch, would it have this subroutine?”

“If I were building that team from scratch, would I hire him to be on it? To run it?”

Here’s the kicker: this little exercise in fantasy is actually a great way to get back in touch with reality. We get so accustomed to looking at things just one way that we have a hard time seeing them as they are.

This is why some businesses use zero-based budgeting as a self-disciplining mechanism: instead of assuming that last year’s budget is a good starting point, they zero out every line item, then force themselves to think through the ramifications of whatever numbers they put in place of those zeroes.

The process hurts. But it’s worth it.

~

(Photo of the zero mileage post in the York railway station by Redvers.)