Sometimes, well-performing organisations move into ‘coasting’ mode – they know they are good, so they keep doing what they are doing, perhaps taking advantages of new technologies or ‘obvious’ improvements when they come along, but not actively striving for change and improvement.
in such cases, the leaders of the organisation have to find some way of providing a stimulus – forcing them to think more deeply about improvement opportunities.
One such stimulus can come from zero-based budgeting where the organisation makes departments bid for all the funds they need rather than taking last year’s budget and adjusting it to reflect changes.
If the leadership at the same time suggests that the total budget allocation will be no more than, say, last year minus 5%, then departmental managers have to think more deeply about how they can run their departments and achieve agreed outcomes. Those departmental managers might think such an approach is ‘unfair’ – but if it unleashes creativity and higher productivity, perhaps a bit of unfairness is what is needed.