Don't rush it
All too often we see organisations who view their operating model projects as little more that organisational re-designs. They have a few workshops that talk in an unstructured way about their business priorities and maybe write up some different options as to what the shape of their organisation could look like.
Then they rapidly jump to the implementation and kick off a protracted organisational restructuring programmes to try and get the company to adapt. Inevitably the organisation pushes back and without a clear understanding of processes, priorities, accountabilities and the way in which the new design hangs together, any benefits that may have been intended get slowly eroded.
Why operating models?
Operating models help to define your organisation and the way it works. In our experience, a well-defined and articulated operating model represents the ‘what’ of any business or business function. It is the bridge between strategy and strategic objectives and day-to-day operations. It guides teams (at all levels), provides the blueprint design and operating practice, and enables the behaviours that will be needed to realise the strategy and vision.
How to develop your operating model
Defining an operating model is a disciplined and structured process that will translate your strategy, and articulate your value drivers and priorities. It will ensure consistency and common understanding and help re-shape your organisation in that image.
Before designing an operating model your business leaders will need to agree on the type of business they want to lead and where the emphasis will be placed: operationally excellent, customer focused, asset information rich, digitally enabled or a combination of these and other factors.
It is important that robust design principles are the foundation of your operating model transformation. These design principles will require intentional choices about the trade-offs needed for your strategy to succeed. You will need to work collaboratively to build the key elements of the operating model in iterations – from structure and roles to processes and metrics – which will ultimately form the core components of the operating model itself.
Don't forget your existing model
It can be tempting to just get on with the new rather than reflect on how you operate at the moment. Don't forget to spend time on establishing a representation of your current operating model, and in particular gathering insight on the current strengths and weaknesses. Alongside views from your stakeholders try and ensure that your analysis is based on data and existing performance rather than just a desire to do something different. At this point you may also want to consider your 'as-is' model against emerging trends and industry best practice to inform the model development.
Develop the future state
Through a series of structured workshops you should start to systematically review the advantages and disadvantages of the different target operating model options that might be available to you and select the preferred components of the target operating model, and thus select a preferred option.
Within this process you should comprehensively consider aspects such as skills, information, process, governance, technology and data. Your business stakeholders involved in the design process should consider all options and select a preferred option as the basis for further detailed development and documentation.
This detailed development should involve a structured and comprehensive process to develop further detail around aspects such as organisational structure, headcount, financial benefits, roles and responsibilities, KPIs, processes, governance and compliance, information and technology.
If all you do at this stage is jump straight to the organisational structure and expect the new operating model to work successfully you are making a significant mistake.
Take a step back, don't rush the process and ensure that the model you are designing has been considered and refined from all of the necessary dimensions. That said, don't spend so long doing so that you lose the momentum and support of your business or worse find that you lose competitive advantage as a result.
Get your implementation right
Don't forget that your stakeholders will not truly see or feel anything that has been produced or developed until implementation of the target operating model itself starts and takes hold.
It will be critical to not let up on any momentum once the operating model has been agreed. Strong implementation will include identifying initiatives that will help achieve new goals, placing those initiatives in the broader context, assigning accountability for planning implementation and executing on those plans with a managed change programme and structured communications.
Working with many field service organisations, at Leadent we have helped organisations design, develop, refine and implement their operating models and to deliver greater benefits from doing it right.
Talk to us if you need some help and fresh ideas.