Zero-Based Target

Zero-Based Targeting (ZBT) is a powerful tool for unlocking quality and productivity. ZBT drives innovation, disrupts entrenched paradigms, and fosters continuous quality improvement.

“Our duty is to encourage everyone in his struggle to live up to his own highest idea, and strive at the same time to make the ideal as near as possible to the Truth.” ~ Swami Vivekananda

“We don’t fix problems, we add value. Zero problems = zero-based thinking (ZBT)

Introduction

Short term, tactical thinking can hinder long-term strategic vision. We become busy working IN the business, and have too little opportunity to work ON it. A chronic lack of strategic, growth-oriented opportunities, itself becomes a burden, adding to waste and fostering inefficiency.

But, there is a solution.

Zero-Based Targeting (ZBT) is an incredibly powerful tool for unlocking quality and productivity on your team. ZBT drives innovation, disrupts entrenched paradigms, and fosters continuous quality improvement.

ZBT also keeps you focused on the big picture, allowing you to accomplish aggressive, seemingly unrealistic goals. It bridges the chasm between strategic long-term value, and tactical short-term ambitions by moving teams beyond their current capabilities, even if they’re already performing well.

Like most things worthwhile, ZBT is a skill you must develop over time. If you become committed to the practice, and its principles, you will surely unlock its power.

The ideal state

“It is impossible to create a light bulb by iterating on a candle.”

ZBT challenges us to think in a contrarian manner. It challenges us to use future data (our visionary ideal state), rather than existing data (our current limitations and resources) to plan our work.

Traditional process improvement plans the future by iterating on the current status quo (i.e., resources and limitations). However, ZBT plans the future by visualizing your ideal state, and then iterates toward that. In short, iterating on the status quo is transactional, while ZBT is transformational.

Therefore, when calculating your ZBT, you should ask, “how much time would each step take in a perfect world?” Zero-based Targets are not meant to be easy, or achievable within a few months. Your ZBT goals should seem aggressive enough for people to say, “No way. That’s not possible.”

As a rule of thumb, if your ZBT is less than 2x your team’s average performance, then you likely haven’t performed the ZBT properly.

The value stream

In business, the concept of value stream is used to distinguish value-added activities from non-value-added activity. Value-added activities are those our customer is willing to pay for. Activities and processes which are directly tied to delivering our products and services.

An ideal state exists when all of your team’s resources and activity - everything you do - go towards creating and delivering value directly to the customer. The goal of your ZBT is to imagine your team’s ideal state, and then iterate toward that worthy (though seemingly unrealistic) goal in the real world.

Theoretically, an ideal state is impossible to achieve because systems and networks are inherently imperfect. Yet, ZBT helps you maximize efficiency, in spite of current limitations.

Brainstorming the ideal

To imagine your team’s ideal state, you must overcome entrenched thinking and outdated perspectives. Go beyond the current limitations, and imagine the perfect resources and ideal capabilities needed to fully support your ideal state.

To help you visualize your ideal state, it’s helpful to start with a brainstorming session. Here are several questions you can ask yourself to help guide your session.

  • “Which steps in my process would the customer pay for (value-added)? Which steps would they not pay for (non-value added)?”

  • “Which forms of waste do we currently experience, but which wouldn’t exist a perfect world? How much time could we save by removing these inefficiencies?”

  • “Can we use automation to overcome these inefficiencies? If so, which automations? What are three key automations that exist in a perfect world? How many process steps do they eliminate? How much time do they save?”

“Fixing” vs. breaking-through

Reactive culture kills productivity and morale. Tactical thinking, alone, creates a productivity loop which leads to decreased efficiency. Zero-Based Targeting is all about chasing and fostering the breakthrough.

ZBT forces us out of such loops and prevents us from trying to “fix” our way into high-performance. Continuous cycles of innovation and improvement create real long term value, and propel your team to success.

Get close to the work

Your role in ZBT is to personally perform several units of work in order to measure results. This will help you gain deep and meaningful insights into the people and processes you manage.

Produce the units, yourself. Don’t ask a team member to do it for you. Be motivated enough to dive deep, and stay granular. Staying close to the work produces the highest quality ZBT. In addition to gaining unique business insights, you will also garner respect from your team. Their engagement increases exponentially when they see you aren’t “above” doing the work.

Even senior leaders - like our VPs, SVPs, and EVPs - use ZBT to gain traction and create momentum across enterprises. It is a tool for, literally, every leadership level. More established managers - including senior leaders - may find themselves outside of their comfort zones, being so close to the work. Maybe they’ll comment, “I’m used to making strategic decisions and I haven’t done that kind of work for the past 15 years.”

However, this perspective actually creates a strong case for personally producing the units. Managers should dusts off the cobwebs, if needed, and make every effort to get back into the details. Higher-level managers bring expertise that enables them to challenge and improve their team’s processes.

How to perform a ZBT

1. Shed current limitations

Carve out a 3-4 hour block of time to focus. Turn off email, chat, and all other distractions. Start with a blank google Doc, and brainstorm what your process looks like in it’s ideal state. As you brainstorm, consider these questions:

  • “What 3 automations would I have in place in an ideal world?”

    • “How many steps in my process would this eliminate?”

    • “How much time would these 3 automations save?"

  • “What is 1 inefficiency, 1 delay, and1 bottleneck that doesn’t exist in an ideal world?”

    • “How much time would be saved by removing each one of these?”

  • For each step, ask, “Is this step value-added, or should I consider it as a waste (i.e. remove from my ZBT)? If I was the customer, would I pay for the work done on this step, or not?”

2. Personally produce several units from the ideal state while you measure time

We mentioned that staying close to the work produces the highest ZBT. Therefore, you should produce several units, yourself, in order to yield the highest quality insights possible. Now that you’ve blocked time off for your ZBT, make sure you have a running timer to document the amount of time each step takes. You should record your screen as you produce each unit.

Finish the process, then go back and watch the video as you measure time for each step. To produce a great ZBT, you’ll need to produce multiple units according to the table below. For any ZBT, you need to ensure that the steps are broken down into <10 minute granularity (IQB5.7).]

Number of hours to produce a unit

Number of units you should produce for your ZBT

<= 1 hour

4 units

2-3 hours

3 units

4-7 hours

2 units

>= 8 hours

1 unit

Your ZBT needs to be based on the same unit type for which you built your TMS. If you have multiple unit types (e.g. writing test cases and executing test cases), you will need to perform multiple ZBTs. Do not send these units to production. Rather, perform your work in simulation/read-only mode. For calls, or end-user related units, avoid direct contact with the clients.

Since you are completing a unit from a blank slate, you will not have access to all the improvements you imagine in an ideal state. As such, you may need to make assumptions about how much time a step would take in an ideal state. You want to minimize the need for these assumptions and when you make them, ensure they are detailed and data-driven.

3. Document, Explain, and Challenge your Team

Once you have your ZBT, it’s unwise to rush to your team and immediately propose your ZBT target as a new team goal. Instead, have an information sharing meeting to first introduce how you reached your specific target. List the insights you discovered, and show how you delivered the unit. Your coach can then understand your ZBT and guide you for improvements.

How do you create a ZBT for teams with more than one unit of work?

For teams with more than one unit of work, perform a ZBT for each ticket type. Apply the team’s ticket type distribution, and calculate the weighted average.

Ticket Type Analysis

How do you create a ZBT if you can’t personally produce a unit?

If you receive an exception from personally producing a unit, follow these steps:

  1. Forget your TMS completely while working on ZBT.

  2. Shadow your team's top performer during the entire work of at least 2 units, and you describe the steps yourself, rather than relying on that teammate to do so.

  3. Provide steps completely independent of TMS.

  4. All steps should be <10 minutes.

Conclusion

Zero-based Targeting is an incredibly powerful tool for unlocking performance, helping you to unclog your mind, and to take a step back. Decluttering your view in this way simplifies complications, and allows you to breathe easy as you focus on big picture questions.

Remote workers who understand the potential impact of this powerful tool, can use it to unlock new levels of quality and productivity for themselves, personally, as well as for their team.

Videos

In the past, as mentioned in the video (7th minute), we wanted managers to do ZBT before, to allow people think independently from TMS. However, later we realized managers (especially the new hires who never worked in the factory before) deliver poor/unrealistic ZBT because they don't even know what the team does. As a result, we concluded that TMS needs to be done first so that manager can understand what the team does.

Examples

1. MS.Central.VMware

2. Core Renewal

3. MS.SaaS.CA

  1. Example ZBT from Eng.Code Cleanup Team