Understanding The Operating Model
If the business model is the what, the operating model is the how — the way an organisation delivers its value proposition day to day.
The Operating Model starts with vision and strategy, and the design principles that translate strategic intent into testable rules. It shows how the operating model delivers the value proposition through capabilities and value streams, and how it is designed across six dimensions: processes, organisation, people and skills, information and data, technology, and locations and sourcing. It also connects governance, decision rights, performance measures, and the method for moving from the current operating model to the target through gap analysis, a transition roadmap, and the change portfolio.
How To Use It
- Start with vision and strategy, and how strategy is distilled into the design principles that govern every design decision.
- Trace how the operating model delivers the value proposition through the capabilities the organisation must have.
- Explore the six design dimensions and why an operating model is designed across all of them together.
- Follow how governance allocates decision rights, sets policies and standards, and uses performance measures to keep the model honest.
- Walk the journey: assess capabilities, baseline the current operating model, design the target, analyse the gap, and sequence the transition roadmap.
- Consider the context — customers, leadership, and culture — that determines whether the target operating model will actually land.