Bill Canady argues incremental budgeting rewards accumulated mess. Instead, ask: if you rebuilt the business today, would you build it this way? This shifts budgeting from defending cuts to actively designing the organization.
Man, that's counterintuitive, but that's how it works. Incremental budgeting is regressive. It rewards accumulated mess. So zero up, ask a different question. Not what should we add? One question, and it's the whole exercise. If we rebuild this business today, what would we build it? And would we build it this way again? That's it. That's zero up. Everything else is just mechanics. If we rebuilt the business today, would we build it the same way again? And notice what that question does that a cost reduction target doesn't do. A cost target asks people to defend their budget. This question asks them to design one. Those are completely different conversations, and they produce, predict completely different behavior.
