There is no one-size-fits-all Operating Model. It is important to consider, not only the organizational structure but also the specific organization's strategy, culture and ways of working when designing it. The model should detail how the organization’s different functions should collaborate in order to efficiently execute on the strategy.
Profit and non-profit organizations have looked for ways to improve their operational efficiency since the dawn of time. What is new, for the last couple of years, is the use of Operating Models to take a more holistic approach. The Operating Model enables a bridge between the business strategy and the organization and is thereby assisting all employees to deliver on the business strategy. It ensures clarity and transparency of the overall structure as well as being an important tool to drive and coordinate change of culture, value chain, processes, governance and organization.
Our engagements led us to realize that different organizations take different approaches regarding their Operational Model. There is nothing wrong in that as such, as long as the right and desired results are reached. However, there are a few key pragmatic principles that should not be overlooked when approaching a new or updated Operating Model.
- There is no one-size-fits-all Operating Model. It is important to consider, not only the organizational structure but also the specific organization's strategy, culture and ways of working when designing it. The model should detail how the organization’s different functions should collaborate in order to efficiently execute on the strategy.
- The Operating Model is not a theoretical framework that executives use to control the organization. Having a theoretical approach and building the Operating Models top-down rather than engaging the employees and build it bottom-up will build silos rather than approaching a cross-functional perspective. Failing to embed the Operating Model with all employees during the design making it a desk-top product that is difficult to implement
- Do not underestimate implementation lead time. It will be time- and resource consuming to implement a drastic change in the Operating Model. Even though the model gives a good framework for the different dimensions, it will still take time to do it right. Each and every one is complex, and it will not be easier if you do them simultaneously.
We at Ascend believe that the Operating Model is here to stay and that it will become even more important going forward. We are in the middle of an era of mega trends, such as technology shifts, environmental crisis and more vulnerable financial systems. The decade we just entered is one where we need to be more agile and swift. The Operating Model provides the necessary structure to de-centralize decision-making and enforce cross-functional way of working.