Zero-Based Thinking: Restart the Company Every Year

“Reorg could not be more simple. Because the company’s produc- tive assets are people, not machinery, CA’s only constraint in reinventing the system to use them most effectively is the cur- rent product base, which must still be sold and supported. Charles calls this “zero-based thinking,” as against zero-based budgeting. The latter assumes the corporation is already doing the right thing, while the former determines what the corpora- tion should be doing and only then begins to allocate resources. Zero-based thinking is actually start-up thinking, but with none of the constraints: a functioning company is already in place, replete with product line, established clientele, dependable sup- pliers, to say nothing of solid credit, positive cash flow, money in the bank, and trustworthy personnel. So why change it?”

“In fact, Wang seemed to run the company by whim, so that at least once a year he would reorganize it from top to bottom. The rumor was he did it every month. By himself. Just like that.”