Is your operating model designed for the global trends reshaping customer needs, competitive positions, and supply chains? To assess operating model fit and effectiveness in today’s rapidly changing environment, leaders—from company executives to department heads—should ask themselves these questions:
- How well have we been able to scale the organization, offerings, processes, and footprint?
- Does it make sense to continue to manage our business using the same operating model?
- What aspects of our operating model need to be changed, and how?
Four Steps to Ready Your Operating Model for Uncertainty and Change
1. Take stock of what your operating model is, and is not
While strategy defines the “what”, operating model details the “how”—and it is more than an organizational chart. An operating model provides a foundation for a business and the framework in which it operates. It is critical to understand and clarify the role of each component of your operating model—Governance, Scope of Control, Assets, Processes, Organizations, and Technology—and what needs to change to support your strategic goals in the new normal.
2. Map the impact of emerging and accelerating trends
Staying in tune with and ahead of trends such as localization, virtualization, and simplification is an ongoing challenge for executives. By mapping the potential impacts of trends on each operating model component, leaders can assess how well their operating model will adapt and function. This will yield better decision making in the short-term and result in a fit-for-purpose design in the long-run.
3. Start where you can—do not be overly focused on change
Companies often mistakenly believe that operating model changes need to be an enterprise-wide activity involving all functions. While some operating model updates require enterprise-level transformation, many do not. Realize results faster by starting where you can quickly gain traction. For example, taking a more focused approach (e.g., business unit, back-office, functional area) requires less cross-functional change management.
4. Build a muscle for change management and design redundancy into your plan
Now more than ever, it is critical companies be able to manage change. Flexibility and agility are at the core of survival and growth. Businesses that are prepared to rapidly scale their operating model will have a considerable advantage in the uncertain times ahead. Scaling is enabled by the ability to identify and effectively manage complexity. When complexity grows faster than revenue, scale is diminished. Invest time in better understanding the drivers of complexity, encourage forward-looking leadership, maintain target and employee alignment, establish strong management of change (MoC) processes, and develop cultures of high reliability.
Conclusion: Operating model changes may seem daunting, but the benefits are worth the effort—especially if your company’s survival is at stake. Build a clear and achievable path to reduce operating costs, increase agility, and become a more resilient organization. From a single workshop to a broad transformation program, Wilson Perumal & Company focuses on meeting your organization where it is in the change journey, balancing speed-to-value.