It is hard to think of many big companies that could not benefit from taking a fresh look at their overheads. One, perhaps, is Mars, a family-run confectioner with a tiny, frugal HQ in suburban Virginia. Another is Berkshire Hathaway. In this year’s letter to shareholders, sent last month, the conglomerate’s boss, Warren Buffett, broke a long-standing “no pictures” policy to show off his head-office team, just 24 strong. Mr Buffett’s last big acquisition, of Heinz, was made in partnership with 3G, a Brazilian private-equity firm whose boss, Jorge Paulo Lemann, has a passion for cost-saving. Heinz had already undergone a round of cuts under pressure from Mr Peltz. But 3G found plenty more to trim, as it applied its “zero-based budgeting” approach, in which all spending must be justified from first principles each year. Swathes of managerial jobs were axed, as was the company’s “aviation department”, which ran its corporate planes. Mr Buffett is impressed: hitherto he has mostly bought well-run firms that he could largely leave alone, but now he wants to do more deals like the Heinz one.
