High-impact operating model design in action

Part 1: Reducing the risk of a failed transformation

Posted by Tiffany McDowell Uzair Qadeer and Julia Rudansky on September 20, 2017.

Influential and instrumental, operating models provide a vital link between a company's vision and the design of an organization and, ultimately, the success or failure of the organization. failure of a company. In a truly remarkable way, the design of the operative model acts as a connective tissue between theory and reality. Yet the effective design of an operational model tends to remain one of the least understood organizational topics and continues to escape the armies of sophisticated professionals. In the first part of our three part series on the design of high impact business models, we examine the (often overlooked) role of business models in business transformation, particularly their role in business transformation. activation and support desired behaviors.

What motivates the transformation of the company? Often, it's the need to compete, grow, adapt to changes in markets, technology, customers, the workforce and society in general. Like many of these forces, today's business transformations should be revolutionary, rather than evolutionary (it's not easy to build the organization of the future ) , to design compelling business models to become more holistic, nuanced and sophisticated. The customer-centric organization requires a structure that secures internal behaviors that generate customer value. Yet, the continued existence of failed business transformations prompted us to consider a key question:

Why are employees failing to make the necessary behavioral changes, making transformation efforts useless?

The likely answer is obvious: the operating model was not designed to support the behavioral change necessary for the transformation of the company. Becoming a modern, customer-centric digital organization requires a structure that drives and supports customer-centric digital behaviors that ultimately create value for the customer. An operational model influences the way people work emotionally, philosophically and behaviorally; it provides the organization with a construct to efficiently perform tasks for common values. This construction, in turn, provides the critical spark for people to embrace new ways of working, thus helping to create value for customers and the organization.

Essentially, companies should consider downstream values, principles, and effects on behaviors when designing business models, not just about redesigning processes, implementing new technologies, or reporting relationships. . People do not magically embrace new ways of working; they need a purpose on their work place.

Once companies can effectively link business models to employee behavior, they can dramatically increase the success rate of transformation to the desired future state. So, an extremely powerful border is waiting.

Rethinking the Steps of Designing an Operational Model
To reach this boundary, let's start by breaking down what we mean by an operational model. A model, by its simplest definition, is a prototypical system used as an illustration to follow or to imitate. For example, you could have a 3D architectural layout of a high-rise condo, with different units designed to meet the different needs of the occupants in terms of size, configuration, and activities (sleeping, eating, sitting). relax, entertain, work) and provide the desired user experience. Likewise, an operating model provides a visual representation of how an organization works, not only dictating where and how critical work is done across the organization, but why. In simple terms, an operating model provides the link between the business strategy and the structure of the organization.

Not only must farm models be treated as flexible structures, such as a tower that can accommodate different lifestyles, but it is important to think about the complexities inherent in choosing the type of materials, building the skyscraper, creating a structure that can successfully house its inhabitants, and most importantly, design the very user experience of those who find it there. The type of rooms you build dictate how a family lives with each other, often determining the size of the family in the dwelling, how this family will interact in this dining space to watch TV, and what type of gathering can be organized.

Just like building houses, selecting an operational model has downstream implications for structure and roles, which determine the behaviors regardless of who fulfills those roles and what processes those roles perform. Just as architects are obsessed with all aspects, materials and arrangements to design the experience of people who will live or work in a space, companies should devise operating models that go beyond the traditional components of people, processes and technologies. the organizational results that they want and expect from a particular operating model. Ultimately, an operational model groups capabilities, defines relationships, and dictates how work must be performed to support the desired strategy and vision of the organization.

For example, if a business has a stated purpose of "the customer comes first", what steps must be taken to ensure that every member of the organization has every opportunity to give the priority to the customer? Does it install a customer relationship management system? Does it set up a new incentive structure to pay more for individuals with higher satisfaction scores? Does it create "customer relationship leaders" and structure the company around unique customer segments? Is it launching an eye-catching internal communication campaign shouting "customers first"? Typically, one or more of these tactics are deployed, often with some incremental improvements, but rarely the wholesale change in behaviors that is needed to succeed. This is probably because leaders failed to describe the exact behaviors they needed from their constituents to be successful before starting their intervention.

Go back to go from the front
And if first, before designing an operational model, before implementing a technology, to change the measures and the rewards, restructure roles or spend money how should each individual or group behave in order to make the target state's business model a success? Companies in all sectors are realizing and adopting this new way of designing business models. This new approach focuses on the final behaviors that not only activate an operational model, but also generate the desired value case, unlike the old way that business models were designed to support a business model. case of value without taking into account the final behavior. This design approach often left a void because the operating model did not consider behaviors, leaving nothing in place to drive the value case. A behavior-based operating model establishes a customer-centric organization that organizes around behaviors to generate profits.

 Old Way - New Way

Source: Deloitte Consulting LLP

We have just looked at the "what" of designing a high impact business model. In the second part of this series, Designing High Impact Business Models in Action: Realizing the Ultimate Influence, we will take a closer look at "how" business models influence behavior.

Tiffany McDowell is a leading Transformation & Talent organization in the human capital practice of Deloitte Consulting LLP, where she focuses on helping companies improve their performance. by building new structures. abilities through their workforce.

Uzair Qadeer is responsible for organizational transformation and talent in the human capital practice of Deloitte Consulting LLP, where he specializes in organizational development. and talent strategies. Uzair has provided transformative organizational strategies both in the United States and abroad.

Julia Rudansky is a consultant in the transformation of organizations and talents in the practice of human capital of Deloitte Consulting LLP and focuses on organizational strategies, talent, change management and strategic communications.

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