Beyond cost-cutting: Zero-based budgeting as a strategic growth tool

The following is a guest post from Marc Suidan, CFO at Backblaze. Opinions are the author’s own.

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Just a few years ago, many CFOs — including me — found themselves managing their company’s “growth at all costs” mindset. With near-zero interest rates and abundant capital, the market was rewarding growth above all else.

Those days, for better or worse, are over. Investors who previously focused solely on growth now demand a clear path to profitability. However, too many companies are still stuck in spending patterns that no longer align with current market realities. Cutting costs seems like the easy fix, but arbitrary cost reduction is like cutting muscle along with fat — it weakens the organization just when it needs to be strongest. The solution isn’t to spend less — it’s to spend smarter. The goal is a strategic allocation of resources that maintains competitive advantage while building sustainable growth.

Throughout my career in technology companies, I’ve led over 100 deals worth $250 billion. I’ve seen the difference between successful and unsuccessful transformations. The key lies not in how much you cut but in how strategically you reallocate resources to drive growth. Let me share how zero-based budgeting, when implemented as a transformation tool rather than just a cost-cutting exercise, can help CFOs navigate this shift.

Start with vision, not spreadsheets

The most successful zero-based budgeting initiatives begin with a clear vision of transformation. Instead of starting with cost targets, ask: What is the corporate strategy and the intended financial outcome? What capabilities do we need to achieve our strategic and financial goals? Which capabilities are no longer needed? How are we sourcing all our capabilities to optimize the input costs?

At Backblaze, for instance, we recognized that serving enterprise clients required fundamentally different capabilities than our traditional self-service model. This vision helped frame our zero-based budgeting exercise around a crucial question: Does this expenditure drive innovation and growth in our target markets? The result wasn’t just $8 million in savings — it was a roadmap for reinvesting those resources in strategic growth initiatives to achieve our corporate strategy and our desired financial outcome: be a “rule of 40” company.

Building executive alignment

Success requires more than just CEO and CFO buy-in. Every executive must embrace zero-based thinking, starting from zero and questioning historical spending patterns through the lens of transformation goals. This means evaluating each expense not just for efficiency but for its contribution to competitive advantage.

The key is helping your leadership team see zero-based budgeting as an opportunity to redirect resources toward growth rather than just as a cost-cutting exercise. In our experience, executives become more engaged when they understand they’re not just identifying cuts but finding resources to fund their strategic priorities.

Enabling strategic shifts

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Zero-based budgeting becomes particularly powerful when used to enable strategic shifts in your business model. For example, when we identified the need to move upmarket, our zero-based review helped identify resources tied up in legacy processes that could be redirected toward building enterprise-grade capabilities.

The process should help you answer critical questions like:

• Which historical spending patterns no longer serve our strategic goals?
• Where are we underinvesting in critical capabilities?
• How can we maintain our competitive advantages while building new ones?
• What investments will drive the most value in our target markets?

Measuring success beyond savings

While immediate cost savings are important, the true measure of successful zero-based budgeting lies in how it enables strategic transformation. CFOs should look for several key indicators:

• Improved capital efficiency (Our operational cash flow shifted from -$10M to +$10M year-over-year)
• Strategic capability building (New expertise and talent in target markets)
• Maintained competitive advantage (Industry-leading pricing and innovation)
• Expanded market opportunities (Growth in new customer segments while maintaining core business)

Building long-term value

The most successful implementations of zero-based budgeting create lasting change in how organizations think about resource allocation. It’s not a one-time exercise but a new way of linking spending decisions to strategic goals.

For example, we achieved four consecutive quarters of EBITDA positivity while expanding into new markets by maintaining zero-based discipline and investing in growth initiatives. This demonstrates how financial discipline and strategic growth can work together to create lasting value.

The market may have shifted away from growth at all costs, but that doesn’t mean growth isn’t still crucial. CFOs can help their organizations find the resources to fuel transformation while building a foundation for sustainable growth through strategic implementation of zero-based budgeting.