Operating Model Redesign 窶� 10 Fundamentals

An Operating Model enables the application of a corporate strategy or vision to a business or operation. It is not the organisational structure, but breaks the system into parts and portrays a high-level representation of how an organisation can be best organised to deliver more efficiently and effectively, and to execute its strategy. Because every significant element of business activity is represented, it allows visualisation from a variety of perspectives across the value chain, providing a comprehensive understanding of the organisation. People, processes, information and technology are key components underlying any Operating Model and are critical to its success.

Why review your Operating Model

Reviewing your Operating Model helps you to understand how well you’re currently delivering your capabilities, allowing you to determine what changes you need to make to your model to deliver your strategy.

Operating Model review 窶� critical success factors

Mainsheet窶冱 experience in conducting Operating Model reviews has identified 10 critical success factors.

1. Be clear on the why – What is the review of the Operating Model solving? What are you trying to achieve? What are the key metrics you want to improve on?
2. Business-owned – A consultant-owned project gets an answer but is unlikely to have the long-term result an organisation needs. Provide leadership and allocate your team窶冱 time on the project, don窶冲 pass it off to consultants.
3. Understanding current state – Don窶冲 underestimate the value of a comprehensive understanding of current state ahead of designing for the future state. You窶冤l have a clear baseline for the changes proposed.
4. Operating model principles – Gaining a good understanding of the position of the business on almost 窶湾hilosophical窶� decisions provides the necessary clarity to guide other decisions later in the process. An agreed set of Operating Model principles will also help with trade-off questions.
5. Defining characteristics – Establish a framework or defining key characteristics that are the basis of your Operating Model to provide a skeleton to either change or fill in the blanks during design.
6. Broad engagement – Engage employees across all levels, from the Executive to the front line, to assist with developing an Operating Model that has the right balance between being inspiring and achievable, whilst importantly garnering the support needed for its implementation.
7. War stories – Use real-life examples (situation, root cause analysis) heard from stakeholders during the project to battle test the target Operating Model. These also help to build credibility and shows that you have listened!
8. Outside thinking – Seek ideas from others outside your organisation, industry or geography. Consider future scenarios and emerging technology and trends. Don’t constrain your thinking to the current paradigm. Do this after analysing the situation and complication so your questions are better informed.
9. Compelling narrative – Create a compelling narrative for employees to understand the target Operating Model, why it’s important for the organisation to adopt it and what it means for them. Use this to anchor change messaging and change communications from start to finish as concepts develop.
10. Actionable implementation plans – Consider organisational delivery capacity, key person risks, ability to absorb change and other implementation factors when building a credible roadmap for delivery.

Thoughts from a Mainsheet client 窶� Water Corporation (WA)

Mainsheet recently supported an Operating Model project for the Water Corporation (Western Australia) within its Operations Group. Barry Ford, General Manager Operations, shared his insights from the project.

窶廬f I was to recommence this Operating Model project, I would make sure that we took the same business-led approach with Mainsheet helping to guide us with effective insights. I would also use the same team approach, with Mainsheet facilitating workshops to bring the rest of the business along with us.窶�

窶弋he benefit of having Mainsheet support the project was their ability to bring valuable insights, challenge our people respectfully and create quality artefacts that will ensure our model is easily understood.窶�

Mainsheet regularly supports operating model projects for clients. Contact Shane McEwen to discuss how Mainsheet can support your Operating Model review and redesign.