4 key principles to deliver changes to your operating model

Since March, companies have had to react to the COVID-19 pandemic by setting up their workforce to work remotely, evaluate their supplier base, accelerate IT modernisation plans, and make difficult commercial decisions.

As organisations evaluate the marketplace, changes to customer and supplier behaviour, and rethink what they can leverage from technology, they will be thinking about how to continue to survive and indeed prosper. This will include identifying new business models or revenue streams, how they can be quicker at what they do, what aspects of their change/IT portfolios continue to deliver value and how to build an environment supportive of their staff and to renew a sense of purpose.

In delivering revised strategic goals or transformation change, a critical step in designing and building the future, is to define the next operating model (from the value chain to how this is supported by suppliers, applications, governance models, scorecards, processes and roles) and how to get there from your current state.

There are a number of ways you can do this, whether it's, for example, building out and assessing capability maps or using an operating model canvas.

The main thing is that you need to build out the operating model at a pace that makes it still relevant, get senior leadership bought in and get into delivering tangible results through the portfolio. There are four practical key principles that should help in this:

1. The op model definition is high level. The op model and the way it has been created has to be consumed by senior executives and so has to be described in 10s of pages. It should serve to get alignment, enable key decisions, be easy to test against and provide a way forward into delivery. It should be practical, not perfect and fully defined to the nth level.
2. The new strategy has been defined and agreed. When defining operating model options these are assessed against strategic objectives. This means these will be required to be defined beforehand and there needs to be consensus on the way forward before starting. If this hasn't been done, take a pause before defining the operating model itself.
3. Design work is actively sponsored. Design effort for an operating model needs active commitment from a sponsor and senior stakeholders over weeks. Design is intense and needs leadership to set direction, navigate politics and rapidly make decisions.
4. It's collaborative. Working with a team of open, creative people brings a mix of perspectives and experiences to generate a wider variety of ideas, and lets you test strengths and weaknesses of different options helping to get buy-in early on. Importantly, the team need to be trusted and empowered so that decisions don't need to be revisited and slow down the pace to get into the portfolio.

What do you think? What other factors would you apply to this type of work?