Zero-Based Budgeting: How the Military Does It Lessons from saving $2.4M at a nuclear ICBM base

Published: February 10, 2026 | By Gabriel Denny

In 2020, I took command of the 341st Comptroller Squadron at Malmstrom Air Force Base—CFO for America's largest nuclear missile wing with a $720M budget. Within months, I led the wing's first-ever Zero Base Review. The result? $2.4M in savings and a complete restructure that set up a $130M FY21 budget execution.

Here's how we did it—and what your business can learn from military budgeting discipline.

What Is Zero-Based Budgeting?

Most companies budget by taking last year's numbers and adding 3-5%. That's incremental budgeting. It's easy, it's fast, and it's lazy.

Zero-Based Budgeting (ZBB) starts from zero. Every dollar must be justified. Every program must prove its value. Nothing gets funded "because we did it last year."

It's harder. It's uncomfortable. And it works.

The Malmstrom Challenge

When I took over as Squadron Commander and CFO in June 2020, Malmstrom was facing multiple pressures:

COVID-19 impact: Operations disrupted, budgets uncertain, new costs emerging
Mission-critical infrastructure: Nuclear deterrence doesn't pause for budget reviews
37 commanders and directors: Each with their own priorities and "sacred cows"
Limited visibility: Years of incremental budgeting had created legacy spending no one questioned

The Wing Commander tasked me with conducting the first Zero Base Review in the wing's history. Translation: "Find savings without breaking the nuclear mission."

No pressure.

The Zero Base Review Process

Step 1: Build the Team

I didn't do this alone. I brought together:

Financial analysts from my squadron
Representatives from every group (Operations, Maintenance, Mission Support, Medical)
Contracting and legal experts
Subject matter experts who understood mission requirements

This wasn't a finance-only exercise. Every stakeholder had to participate.

Step 2: Categorize Everything

We broke the $720M budget into three categories:

Mission-Essential: Required for nuclear operations (non-negotiable)
Mission-Enabling: Improves effectiveness but not strictly required
Nice-to-Have: Discretionary, legacy, or unvalidated spending

The hard part? Getting honest about what's actually "mission-essential" versus what we just want to keep funding.

Step 3: Challenge Every Assumption

Every program had to answer:

What mission outcome does this support?
What happens if we don't fund it?
Can we achieve the same outcome for less?
Is this the right team doing this work?
Are we duplicating effort somewhere else?

This is where the real work happened. Commanders had to defend their budgets—not with emotion or tradition, but with data and mission impact.

Step 4: Remove Redundancy

We found multiple cases where different units were funding similar capabilities:

Three different IT contracts for the same type of support
Overlapping maintenance programs
Duplicated training efforts
Legacy contracts that had outlived their purpose

Consolidation alone saved hundreds of thousands of dollars.

Step 5: Reallocate, Don't Just Cut

This is critical: Zero-based budgeting isn't about slashing costs. It's about strategic reallocation.

We identified $2.4M in savings. But we also:

Redirected funds to critical Command and Control (C2) capabilities
Invested in infrastructure that had been neglected
Funded innovation initiatives that improved mission effectiveness

The result? We didn't just cut $2.4M—we improved readiness while spending less.

The Results

By the end of FY20:

$2.4M in validated savings
$130M FY21 budget built on solid footing
Critical C2 capabilities funded that had been delayed
$20M in end-of-year execution because we had visibility and control

More importantly, we changed the culture. Leaders stopped assuming "last year's budget" was the baseline. They started thinking strategically about resource allocation.

What This Means for Your Business

You're not running a nuclear missile wing. But the principles are the same:

1. Incremental Budgeting Hides Waste

When you start with "last year + 5%," you're compounding inefficiency. Programs that should have been cut years ago keep getting funded.

2. Zero-Based Forces Accountability

Every department head should be able to defend their budget with data, not emotion. If they can't explain the ROI, why are you funding it?

3. You'll Find Money You Didn't Know You Had

Most companies have 10-20% of budget allocated to "legacy" spending—things they started years ago and never stopped. Kill those. Reallocate to growth.

4. It's Not About Cutting—It's About Optimizing

Zero-based budgeting isn't austerity. It's strategic resource allocation. You cut what doesn't work and invest more in what does.

How to Run Your Own Zero Base Review

Step 1: Get buy-in from leadership. This doesn't work if the CEO isn't committed.

Step 2: Build a cross-functional team. Finance can't do this alone.

Step 3: Categorize spending: Essential, Enabling, Discretionary.

Step 4: Challenge every line item. Make people defend their budgets.

Step 5: Reallocate strategically. Don't just cut—invest in growth.

Step 6: Execute fast. Don't let this drag on for six months. We did it in one quarter.

The Bottom Line

Zero-based budgeting isn't easy. It's uncomfortable. People will resist. But if you want to scale efficiently, you need to know where every dollar is going—and why.

At Malmstrom, we saved $2.4M and improved mission readiness. In your business, you'll find money you didn't know you were wasting and redirect it to growth.

That's the difference between budgeting and strategic budgeting.

Want help running a Zero Base Review for your business?

Contact me for a free consultation or call (616) 881-6777.

About the Author

Gabriel Denny is a retired Air Force Major who served as CFO for America's largest nuclear missile wing. He led the wing's first Zero Base Review, saving $2.4M while improving mission effectiveness.

Now he helps growing businesses optimize their budgets and scale efficiently.

Key Takeaways

Zero-based budgeting forces accountability
Most companies have 10-20% waste in legacy spending
It's about strategic reallocation, not just cutting
Cross-functional teams are essential
Execute fast—one quarter, not six months