Target Operating Model

It’s all about alignment

Whatever the content of your TOM, the watchword is alignment. The real value of designing an operating model is in ensuring that the business is aligned to its strategic ambitions and goals, and that all sub-components, are working together  in harmony to make the business succeed. Without a conscious effort to develop a cross-functional operating model, it can sometimes be easy for functional silos to develop and grow in isolation, resulting in a lack of alignment with strategic goals across the organisation.

But we’re already aligned. Aren’t we?

Developing a winning TOM will often challenge existing boundaries, requiring a good level of open-mindedness and collaboration across the business. Cross-functional working can sometimes come with a little friction. The most prominent boundaries exist in large businesses with established operational silos or organisations that have grown through acquisition, but not fully integrated their acquired businesses. To deliver a more efficient and appropriate operating model, it is often necessary to challenge current norms. In such cases, it is critical that leaders and decision-makers are aligned on the strategic goals of the business, that time is invested in bringing stakeholders on a journey, and that the overall sponsor has the authority to set direction and mediate as necessary. To do this effectively, you will need someone with no political agenda to ask the difficult questions and challenge the status quo. Our independence and collaborative style lend themselves to helping you involve and engage the right stakeholders, in the right way, to develop an operating model that has the support of your cross-functional leadership team.

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Easy to design, hard to deliver

Our extensive delivery experience can help you to avoid the common pitfalls that can result in a beautifully-crafted TOM being undeliverable or unadopted and reduced to expensive shelf-ware. Involving representation from across the business, people with real operational knowledge and experience of your current business reality, rather than designing in isolation, will improve the quality and utility of your TOM. Designing the operating model with implementation in mind will help to bring tangible benefit to the business sooner. For example, considering quick wins that can be implemented in the short-term and transition states that can be achieved gradually over the medium to long-term to bring phased change to the business.

Outputs should be measured

Once you’ve invested the time and effort to design and implement a new operating model, you will want to know how well it’s performing, how well it is supporting your strategic objectives, and what business results it’s helping you to attain. Considering the key drivers of business success alongside your operating model design will allow you to build-in the information and measures which will you will use, via your decision-making and leadership arrangements, to steer the business towards its strategic and operational goals. Practically, this often takes the form of KPIs, management reporting dashboards and balanced scorecards aligned to your  strategic objectives.

So what’s next?

By now you have probably created a strategy which led to the development of your Target Operating Model. Now you need to make the change happen. We have helped our clients successfully mobilise and deliver their major transformation programmes, bringing positive and lasting change to their businesses.

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