Creating a target operating model for our new organisation has been fundamental to achieving our vision and goals. We have doubled in size and expanded our geographical footprint, we are operating in an unprecedented democratic environment which is adversely impacting the market and we are simultaneously rolling out a digital transformation programme to enhance our resident experience. Taking this into account it is very clear why a structured approach to organisational design is critical to optimise our business and achieve our goals.
What is an operating model? It’s important not to confuse an operating model with a business model. A business model is the sexy bit, focusing on driving profit and commerciality to deliver value to its customers – the What/Why. An operating model is responsible for the execution of the business strategy – the How/Where/When. Both models are equally important; a business model without an operating model is unlikely to deliver its goals.
A good operating model should function as a bridge between the organisation’s strategic vision and the day to day running of business operations. A target operating model is a description of the organisation’s future-state, based on current knowledge and understanding (this can often prove trickier during a merger, as you are dealing with two foundation sources).
It would be impossible for me to outline here the methodology and tools we used to create our target operating model, it’s a big job! I have been trained in developing operating models; however I can honestly say that most of my learning has come through the experience of our merger, it’s been a steep learning curve. I can share some tips though, (which I noticed usefully fall into 4Cs!) . . .
Consultants – you don’t need to use consultants to create your model, but you will need to develop some internal capability; building a successful operating model is not something that can be learned from a book. I strongly believe that the best operating models are built by the people that work within the business; they have the knowledge and expertise on what will/won’t work.
Compelling vision – a picture is worth a thousand words. A good operating model, at its highest-level should be simple and easy to explain. Where possible use pictures and visuals rather than detailed reports, the vision can be used to engage your people and residents, provoke responses and start a conversation.
Co-create – where you can, create your future model with residents and staff, but be clear at the outset what they can and cannot influence. The design principles are, in my view, the most important part of an operating model. Design principles are not as easy as you may think to create, but if you spend the time here you have a strong foundation on which to build the model.
Communicate, communicate, communicate
There is no single “cut and paste” solution, each organisation operates in its own communities and markets, has its own culture, budget and goals. However, there are certainly some common methods and approaches which can be used to develop a strong target operating model.