The components of an operating model are the guiding principles, organizational structure, processes, technology, people and culture that make up the way a company offers value to its customers. It includes all the value delivery processes carried out by the company. In simple terms, it responds to the way in which the company offers the promised value to customers. Key activities are the most important tasks that form the backbone of the company.
For a manufacturing company, key activities would include purchasing raw materials, producing, delivering products to customers, etc. Key partners are all key external stakeholders, such as suppliers, manufacturers, suppliers, etc. For Uber, key partners include taxi drivers, API providers such as Google Maps, payment processors, etc. Key resources include organization, locations, information and management systems. The value delivery process is an important component of the operating model but it only answers the question of “what is the process” without focusing too much on how the process works and how everything is linked. Whether your organization has a purpose or a profit motive, your operating principles should always align with a customer-centered strategic plan.
While it is not always appropriate or necessary to redesign the operating model, continuous adjustment and optimization should be considered essential to remain relevant and agile in a constantly changing environment. An operating model is one of the tools that leaders can use to help them formulate and execute their strategy. If your “as is” review uncovers problems with your current operating model, you may decide to redesign your operating model to be fit for purpose in the context of responding to strategic disruptions. An operating model is an abstract and visual representation (model) of how an organization offers value to its customers or beneficiaries as well as how an organization actually manages itself. A solid and effective operating model is based on any organization being clear about the value it is trying to create for whom and the results it is trying to generate. Transformations that affected seven or more of the 12 elements of an operating model were three times more likely to undergo a successful redesign.
The operating model canvas is a visual way of mapping the people, processes and infrastructure needed to put your business model into operation. However, probably the most common use of the operating model tool is to get managers from different functions or divisions to align how they are going to work together for the benefit of all. With this in mind, perhaps the most important aspect of reviewing and redesigning your operating model is to involve internal and external stakeholders in that process. It translates that plan into operational requirements and decisions and often also contributes to the plan by showing the areas where the plan will be difficult to implement. Needless to say, it's essential to consult with those who manage their daily operations before making changes to their operating model. The term “operating model” is most commonly used today to refer to the way in which a single business division or single function operates.
He leads customer-focused efforts to develop innovative approaches to large scale operating model transformations and create dynamic, high-performance teams to guide organizations through disruption and change.
