Organisations are great at setting their strategy and identifying their goals, but they fall short when it comes to their operating model review and redesign, the key component that enables the strategy and drives the achievement of goals.
Operating models consist of key elements that need to be clearly defined and put in place for an organisation to operate effectively. There is no one-size-fits-all answer. The HOW will look different depending on the size and maturity of the organisation. It is important to note that an operating model cannot stand on its own; a clearly defined strategy and business model is essential.
If the organisation wants to shift from traditional, hierarchal to agile, effective, and customer-focused, yet their processes, technology, culture, and ways of working remain the same, they will never achieve their strategy and aspirations. To put is simply, if you want to be a speed boat but your look, feel and engine is that of a cargo ship, you will fall short.
Before leaders jump into operating model review and design, they first need to decide what organisation they want to be: client centric, agile, traditional, hybrid. This needs to translate into their strategy and business model, which is the foundation and starting point for operating model design.
Key elements the leaders need to focus on to ensure the successful operating model design include:
Clearly defined design principles: Taking the strategy and clearly articulating how the organisation will operate in future will guide the design of the operating model and ensure consistency.
Ways of working: Clearly articulate the purpose and culture of the organisation; “the way we do things around here.”
Structure: Ensure the structure of the organisation will enable the strategy, be willing to change the old to drive the new.
Process: Understanding the current limitations and re-engineering the processes to drive the new capabilities in the organisation.
People: Drive the people agenda. Clearly articulate the new capabilities and ways of working and ensure your people value chain enables what works best for the organisation.
Governance: Define the decisions right framework, delegation of authority and terms of reference to mitigate risk.
System and technology: Understand the impact of historical systems and technology on your new way of working, process, and strategy to identify opportunities to enhance or discontinue.
The pandemic amplified some of the cracks in organisation’s operating models, highlighting outdated technologies and processes, silos, and hierarchical structures with multiple layers that slow down decision making to name a few. The time is now to embrace a new operating model to rethink the way we do things and ensure a clear alignment between strategy, business model, culture, and our operating model.
Leaders need to come together and look at the business holistically, reviewing and reassessing each business unit or area to ensure alignment between the various operating models. All the pieces need to work and fit together like a well-planned puzzle to enable and drive the organisational strategy and culture.