Navigating Organisational Redesign: Succeeding in Operating Model Transformation
The key stages and activities involved in researching, designing, implementing, and sustaining an operating model.
Organisational redesign is a strategic undertaking aimed at aligning an organisation’s structure, processes, and culture with its overarching vision and objectives. A successful redesign can lead to increased efficiency, competitiveness, and overall growth. The implementation of a new operating model is an integral part of any organisational redesign effort. In this article on Op Model design , we look at the key stages and activities involved in researching, designing, implementing, and sustaining an operating model, as well as highlighting the roles and responsibilities at each stage.
Researching the Target Operating Model
The operating model defines how an organisation delivers value to its customers, generates revenue, and manages its resources. To improve the operating model, organisations need to conduct research and analysis to identify inefficiencies, bottlenecks, and areas for improvement. In this article, we will explore the key steps and roles involved in researching the operating model.
- Step 1: Conduct a thorough analysis of the current operating model: The first step in researching the operating model is to evaluate the existing organisational structure, processes, and systems. This involves analysing the workflows, communication channels, decision-making processes, and resource allocation methods. It’s also essential to assess the cultural factors affecting performance and decision-making. This includes analysing the values, beliefs, and behaviours of employees, as well as the leadership style and corporate culture. By conducting a thorough analysis of the current operating model, organisations can identify inefficiencies, bottlenecks, and areas for improvement.
- Step 2: Benchmark against industry best practices : The second step in researching the operating model is to benchmark against industry best practices. This involves analysing competitors and leading organisations in similar industries to identify successful practices and strategies that can be adapted. By bench-marking against industry best practices, organisations can learn from the experiences of others and avoid reinventing the wheel. This can also help organisations to stay ahead of the competition by adopting innovative practices and technologies.
- Step 3: Analyse external factors and trends: The third step in researching the operating model is to analyse external factors and trends. This involves assessing the impact of technology, economic conditions, and regulatory changes. For example, the emergence of new technologies such as artificial intelligence and blockchain can significantly impact the operating model by changing the way organisations deliver value to their customers. Economic conditions such as recession or inflation can also affect the operating model by influencing consumer behaviour and spending patterns. Regulatory changes such as new laws or policies can also impact the operating model by introducing new compliance requirements or restrictions. By analysing external factors and trends, organisations can identify opportunities and threats arising from these factors and adjust their operating model accordingly.
Roles and Responsibilities
Researching the operating model involves various roles and responsibilities. The leadership team is responsible for setting the direction, providing resources, and overseeing research activities. Internal teams are responsible for conducting research and data analysis and engaging with stakeholders. Subject Matter Experts can provide expertise and insights on industry best practices and trends, helping organisations to identify innovative solutions and strategies.
Researching the operating model is a crucial step in improving organisational performance and achieving sustainable growth. By conducting a thorough analysis of the current operating model, bench marking against industry best practices, and analysing external factors and trends, organisations can identify inefficiencies, bottlenecks, and areas for improvement, as well as opportunities for innovation and growth. By assigning the appropriate roles and responsibilities, organisations can ensure that the research activities are conducted efficiently and effectively.
Designing the new Operating Model
Designing the operating model involves developing the blueprint for how the organisation will deliver value to its customers, allocate resources, and manage its internal processes and systems. The key steps and roles involved in designing an effective operating model include;-
- Step 1: Define Objectives and Guiding Principles: The first step in designing the operating model is to define clear objectives that are aligned with the organisational vision. This involves establishing measurable goals that can guide the design process and ensure that the new operating model aligns with the overall strategy. It’s also important to develop guiding principles to ensure consistency in decision-making and implementation. These principles can help ensure that the new operating model is aligned with the organisation’s values and culture.
- Step 2: Design the Organisational Structure: The second step in designing the operating model is to determine the optimal organisational structure. This involves identifying the hierarchy, reporting lines, and division of responsibilities that will best support the organisation’s goals. It’s also essential to identify the necessary roles and skills required for each function, as well as how they will work together to achieve the desired outcomes.
- Step 3: Develop Key Processes and Systems: The third step in designing the operating model is to develop efficient and effective processes, workflows, and decision-making mechanisms. This involves designing processes that are aligned with the organisation’s goals and objectives, and that can be executed efficiently and effectively. It’s also important to select or create the necessary systems and tools to support these processes, such as software, databases, and communication platforms.
- Step 4: Address Cultural Factors :The fourth step in designing the operating model is to define the desired organisational culture and values. This involves developing a plan for fostering cultural change and employee engagement, and aligning the new operating model with the organisation’s culture and values. This step is critical to ensuring that the new operating model is sustainable and effective over the long term.
Designing the operating model is a strategic process that requires careful planning, collaboration, and communication. By defining clear objectives, designing the optimal organisational structure, developing efficient processes and systems, and addressing cultural factors, organisations can create a blueprint for success that aligns with their overall strategy and vision. By assigning the appropriate roles and responsibilities, organisations can ensure that the design process is conducted efficiently and effectively, and that the new operating model is sustainable and effective over the long term.
Implementing the Target Operating Model
Implementing your operating model involves a series of critical steps that should be followed to achieve success. This includes developing a detailed implementation plan, communicating the change, training and on boarding employees, piloting and iterating, and finally, rolling out the new operating model. Let’s explore each step in more detail, including their inputs, outputs, and the roles/responsibilities involved.
- Step 1: Develop a Detailed Implementation Plan :The first step in implementing an operating model is to develop a detailed implementation plan. This plan should outline the activities, resources, and timeline for executing the redesign. Inputs to this step may include the new operating model design and goals, as well as information on the organisation’s resources and constraints. Outputs may include a project plan, a detailed schedule of activities, and a list of potential risks and issues. The leadership team is responsible for driving implementation, providing resources, and addressing challenges. Internal teams are responsible for executing the implementation plan and ensuring that the implementation process is well-organised, efficient, and effective. Subject matter experts offer guidance, expertise, and resources to support implementation.
- Step 2: Communicate the Change : The second step in implementing an operating model is to communicate the change to employees. This involves sharing the rationale and benefits of the redesign and addressing concerns while providing opportunities for feedback. Inputs to this step may include the new operating model design, employee feedback and input, and data on past communication efforts. Outputs may include a communication plan and a set of talking points or messaging for managers and leaders. The leadership team is responsible for developing the communication plan and messaging. Internal teams are responsible for executing the plan, including organising meetings and creating communication materials. Subject matter experts may provide guidance on effective communication strategies.
- Step 3: Train and Onboard Employees: The third step in implementing an operating model is to train and onboard employees. This involves providing training on new processes, systems, and tools, and supporting employees in adapting to new roles and responsibilities. Inputs to this step may include the new operating model design, employee feedback and input, and information on the organisation’s training and development resources. Outputs may include training materials, employee handbooks, and job descriptions. The leadership team is responsible for ensuring that sufficient resources are allocated for training and development. Internal teams are responsible for creating and delivering training materials and supporting employees through the transition. Subject matter experts may provide guidance on effective training strategies and support the development of training materials.
- Step 4: Pilot and Iterate : The fourth step in implementing an operating model is to pilot and iterate. This involves implementing the new operating model in phases or select pilot areas, monitoring progress, collecting feedback, and making necessary adjustments. Inputs to this step may include feedback from employees, data on performance metrics, and information on external factors that may impact the implementation. Outputs may include reports on the effectiveness of the new operating model and recommendations for adjustments. The leadership team is responsible for monitoring progress and making necessary adjustments. Internal teams are responsible for executing the pilot and collecting feedback from employees. Subject matter experts may provide guidance on effective monitoring strategies and offer recommendations for adjustments.
- Step 5: Roll Out the New Operating Model: The final step in implementing an operating model is to roll out the finalised operating model across the organisation. This involves ensuring smooth transitions and minimising disruptions. Inputs to this step may include data on performance metrics, feedback from employees, and information on the organisation’s resources and constraints. Outputs may include a final report on the implementation process and a set of guidelines for ensuring a smooth transition. The leadership team is responsible for overseeing the roll out and ensuring that the new operating model is aligned with the organisation’s goals and objectives. Internal teams are responsible for executing the roll out and ensuring that employees are adequately prepared for the transition. Subject matter experts may provide guidance on effective roll-out strategies.
Implementing your operating model can be a complex process that requires careful planning, communication, and execution. By developing a detailed implementation plan, communicating the change effectively, training and on boarding employees, piloting and iterating, and rolling out the new operating model, it is possible to ensure that the implementation is successful, and that the new operating model delivers the desired outcomes. Clear ownership can ensure that the implementation process is well-organised, efficient, and effective, and that the new operating model is sustainable and delivers long-term value desired by the business.
Sustaining the new Operating Model
Implementing a new operating model is just the beginning of a journey towards achieving long-term success. To ensure that the new operating model continues to deliver value, it is essential to put in place the activities, processes and controls to sustain it over time. The five key steps involved in sustaining your new operating model, including monitoring performance, fostering continuous improvement, reviewing and updating the operating model periodically, embedding the new culture, and developing talent and leadership capabilities.
- Step 1: Monitor Performance: The first step in sustaining a new operating model is to monitor its performance. This involves tracking key performance indicators (KPIs) and other relevant metrics to identify areas for improvement and make adjustments as needed. Inputs to this step may include data on employee engagement, customer satisfaction, and financial performance. Outputs may include reports on performance trends, recommended improvements, and updates to KPIs. The leadership team is responsible for setting performance goals and tracking progress. Internal teams are responsible for driving performance improvement initiatives and identifying areas for improvement. Subject matter experts provide ongoing support, expertise, and resources to sustain the new operating model.
- Step 2: Foster Continuous Improvement: The second step in sustaining a new operating model is to foster a culture of innovation and continuous improvement. This involves empowering employees to identify and implement process improvements and encouraging ongoing learning and development. Inputs to this step may include data on employee engagement, feedback from customers, and industry best practices. Outputs may include reports on employee engagement and learning outcomes, recommendations for process improvements, and updates to employee training programs. The leadership team is responsible for setting the tone for a culture of continuous improvement. Internal teams are responsible for driving change initiatives and supporting employees in implementing process improvements. Subject matter experts provide ongoing support, expertise, and resources for driving continuous improvement.
- Step 3: Review and Update your Operating Model : The third step in sustaining a new operating model is to review and update it periodically. This involves re-evaluating the operating model in light of changing business conditions and objectives and making necessary adjustments to ensure continued alignment with organisational goals. Inputs to this step may include data on industry trends, customer feedback, and internal performance metrics. Outputs may include updated versions of the operating model, reports on the rationale for changes, and recommendations for additional updates. The leadership team is responsible for reviewing and updating the operating model. Internal teams are responsible for providing input and feedback on proposed changes. Subject matter experts provide ongoing support and expertise for reviewing and updating the operating model.
- Step 4: Embed the New Culture: The fourth step in sustaining a new operating model is to embed the new culture. This involves reinforcing the desired culture and values through ongoing communication, recognition, and rewards and addressing cultural resistance. Inputs to this step may include data on employee engagement and feedback, reports on cultural alignment, and information on cultural barriers. Outputs may include updated communication plans, recognition programs, and training materials. The leadership team is responsible for reinforcing the desired culture and values. Internal teams are responsible for implementing cultural change initiatives and addressing cultural resistance. Subject matter experts provide ongoing support and expertise for cultural change.
- Step 5: Develop Talent and Leadership Capabilities. The fifth and final step in sustaining a new operating model is to develop talent and leadership capabilities. This involves investing in employee development programs to foster necessary skills and competencies and identifying and nurturing future leaders to ensure the long-term success of the operating model. Inputs to this step may include data on employee development needs, reports on leadership development outcomes, and information on future talent needs. Outputs may include updated employee development programs, leadership development plans, and talent management strategies. The leadership team is responsible for investing in employee development and identifying future leaders.
To sustain a new operating model, different stakeholders have different roles and responsibilities. The leadership team sets the tone for a culture of continuous improvement, invests in employee development, and reviews the operating model periodically. Internal teams drive performance improvement initiatives, actively participate in cultural change, and engage in development opportunities. Subject matter experts provide ongoing support, expertise, and resources for sustaining the operating model.
Sustaining a new operating model requires ongoing commitment and effort. By monitoring performance, fostering continuous improvement, reviewing and updating the operating model periodically, embedding the new culture, and developing talent and leadership capabilities, organisations can ensure the long-term success of the new operating model. By assigning the appropriate roles and responsibilities to different stakeholders, organisations can sustain the new operating model and deliver long-term value to the organisation. With a culture of continuous improvement, a commitment to employee development, and ongoing support from subject matter experts, organisations can sustain the new operating model and ensure continued success.
Organisational redesign is a complex and multi-faceted process that requires careful planning, execution, and ongoing attention to ensure a successful transformation. By understanding the key stages, activities, and roles involved in researching, designing, implementing, and sustaining an operating model, organisations can navigate the challenges of organisational redesign and emerge stronger, more agile, and better equipped to achieve their strategic objectives.
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