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Why you need a good operating model

An operating model is a representation of the way an organization conducts its business, including its structure, processes, and resources. It outlines how the organization functions and delivers value to its customers and stakeholders. The operating model also defines how work is organized, how decisions are made, and how resources are allocated within the organization.

A well defined operating model is a critical component of an organization's strategy and helps to ensure that it is aligned with its goals and objectives. A good operating model can help an organisation succeed in a variety of ways:

  1. Alignment with strategy: The operating model helps to ensure that the organization is aligned with its overall strategy and goals.

  2. Efficient operations: A well-designed operating model helps to streamline operations, reduce waste, and improve efficiency.

  3. Customer satisfaction: An operating model that is focused on delivering value to customers helps to improve customer satisfaction and loyalty.

  4. Innovation: An operating model that encourages innovation and experimentation can help an organization to stay ahead of competitors.

  5. Flexibility: An operating model that is flexible and adaptable can help an organization to respond to changing market conditions and customer needs.

  6. Governance: An operating model helps to define roles and responsibilities, ensuring that the organization is properly governed and accountable.

By outlining how the organization functions and delivers value, a good operating model helps to ensure that all aspects of the business are working towards common goals and objectives. It also helps to identify areas for improvement and provides a framework for decision making, enabling the organization to respond to changing market conditions and customer needs.There are several key components of a good operating model: 

  1. Structure: The organizational structure of the organization, including the way it is divided into departments, teams, and roles.

  2. Processes: The processes and procedures that are used to achieve the organization's goals and objectives.

  3. Resources: The resources that are required to deliver value to customers and stakeholders, including people, technology, and financial resources.

  4. Culture: The culture of the organization, including its values, beliefs, and behaviors.

  5. Governance: The governance structure of the organization, including the roles and responsibilities of different stakeholders.

  6. Performance measurement: The metrics and KPIs that are used to measure the performance of the organization and its individual components.

For more help in creating an operating model for your organisation be sure to look at Expert Toolkit's Essentials of Operating Model Design.


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