Contrary to its reputation, 3G views Zero-Based Budgeting (ZBB) as a way to instill an owner's mindset, not just to slash costs. The bulk of their returns comes from growth, while ZBB is a secondary process that frees up capital and aligns the team around efficiency.

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After nearly failing, OpenGov adopted a frugal culture and discovered it grew faster. Less spending reduces system noise and inefficiency. A leaner, more focused sales team, for instance, can become more motivated and effective, leading to better results.

The true purpose of a budget is not to limit spending or perfectly predict outcomes. Its value lies in creating a baseline for comparison. Analyzing why actual results differ from the budget provides critical insights for strategic adjustments, turning it into a tool for understanding, not judgment.

3G's playbook involves installing a high-urgency culture, typically found in cash-strapped startups, into established companies. This is achieved by hiring people "who want to get everything done yesterday" and creating extreme transparency around ambitious goals, focusing 95% of energy on execution.

Large corporations can avoid stagnation by intentionally preserving the "scrappy" entrepreneurial spirit of their early days. This means empowering local teams and market leaders to operate with an owner's mindset, which fosters accountability and keeps the entire organization agile and innovative.

While bonuses tied to revenue incentivize employees to perform specific tasks, they are purely transactional. Granting stock options makes team members think holistically about the entire business's long-term health, from strategic opportunities to small cost savings, creating true psychological ownership.

Don't just tweak last year's product plan. Start from a blank slate by defining business goals first, then allocate resources to the value propositions needed to win. This avoids getting stuck in maintenance mode and forces a focus on strategic priorities.

A core 3G management principle is for leadership to define the strategic goals (the "what"). However, teams are given complete autonomy to determine the execution methods (the "how"). This pushes decision-making closer to the problems and attracts top talent who thrive on freedom and problem-solving.

Jacobs's team uses the acronym WOTWOM—Waste Of Time, Waste Of Money—as a rapid check on new ideas. Any suggestion can be challenged with this label if it doesn't clearly contribute to organic revenue growth or margin expansion. This simple tool creates a culture focused on high-leverage activities.

Contrary to its reputation, zero-based budgeting frees marketers from historical spending patterns. It forces a fundamental re-evaluation of tactics against objectives, often leading to smarter, more effective plans that may even require increased investment.

Lego fuels its extensive innovation pipeline by linking it directly to operational efficiency. A global "Partner for Productivity" program systematically generates significant annual savings. This creates a powerful cultural understanding that cost discipline is not an obstacle to creativity but the very engine that pays for it.

3G's Zero-Based Budgeting Is an Ownership Tool, Not Just a Cost-Cutting Tactic | RiffOn