The operating model serves as a bridge between strategy and effective execution, moreover a global functional model will set the stage for more efficient and effective operations. For instance, if the workforce strategy includes offshoring and outsourcing, it is of fundamental importance to have an agile onboarding process for which the organization needs to adopt an E2E approach. However, sometimes global functional models find a challenge in adopting and E2E perspective, for example within the onboarding process organization’s need TA, HR, IT to operate as “one” to have an agile onboarding which ensures not only new hires’ performance but also reduce learning curve’s time while achieve great employees’ experience as well. Therefore, several factors have heightened the need for operating models to evolve in recent year including complexity, technology, customer experience and dynamic business boundaries. What is more, the right operating model will take shape by making the right decisions in the following five areas: structure, accountabilities, governance, ways of working and capabilities.

Fit operating model to strategy

First and foremost, an operating model should closely fit the company’s strategy, like a custom-made suit with seams drawn and stitched to accommodate movement and comfort, no matter the shape of the body. Every organizational structure creates boundaries between departments, geographic units or lines of business, and people must learn to collaborate across them. What’s important is to define the seams in a way that reflects how the company creates value, that promotes better decision making and that balances operating-unit accountability with economies of scale. For instance, global process owners for core processes such as onboarding can help organizations to first create visibility about current process performance with an E2E perspective instead of by area. How the organization can nurture itself from talent within employment market is essential for most of current workforce strategies. Moreover, an agile “cultural fit” as well as “core skills’ ramp up” to not only integrate talent to the organization but also make it productive within the shorter possible learning curve will help the organization to deploy its strategy and develop operational competitive advantages.

Put customers at the centre of operating model

Another point to consider is that although most of companies aspire to become more customer focused, the ones that succeed understand not just the needs and priorities of their customers but also the best organizational setup to address those needs. Once BUs are customer centric, then corporate service areas must become customer centric by putting BUs at the centre of everything they do. Continuing with the onboarding example, TA, HR and IT must develop customer centricity by providing BUs with an E2E agile onboarding even though they are different areas within the global functional model, the must not become rigid “silos”. Furthermore, for customers to be at operating model’s center, employees must be not only customer centric but also empowered to act upon customers’ needs. Therefore, by centralizing activities and decisions, organizations are not following the best route to fulfilling customers’ needs. In fact, the choice to centralize should face a high hurdle because companies often underestimate how much frontline accountability, they lose in doing so. An operating model that’s truly centred on customers goes all the way to defining accountabilities on the front lines so that employees can be highly responsive to customers.

Ensure enablement and engagement within the operating model

Companies with highly effective operating models have decided to excel at only those few capabilities essential to realizing the strategy while being “good enough” where that’s enough. Leaders must harness the right people, processes and technology to deliver these capabilities and make sure each dimension of the operating model supports this effort. Smart capability development is essential not only for meeting customer needs but also for containing costs while key capabilities applies not just to the current business but also for the next phase of its evolution. Operating model transformations often involve changing an organization’s profile of skills and experience by developing people’s enablement. A flexible operating model cannot work according to a paint-by-numbers design. That would lead to proliferation of rules within a rigid framework, which limits employees’ problem-solving ability and can’t possibly account for every situation. It’s far more effective to define clear principles for how people work together within and across the seams so that the company can stay agile with minimal bureaucracy. Principles liberate people to do the right thing as long as they have a framework in which they can make the right choices. A healthy principles-driven culture promotes not only agility but also engagement. Principles can clarify expectations around ways of working, serving as a compass to guide behaviour in any situation that might arise. As a conclusion, the right operating model will not only allow the organization to bring its strategy to life but also to become more customer and employee centric to ensure the right culture and mindset to deploy the strategy to get expected business results.

Thanks for Reading.

Marcelo Sauro is an internationally experienced performance and improvement senior manager. He holds an Executive MBA and Master of Science degrees and has helped people and organizations to transform themselves. Not only he led E2E transformations in Global Business Services, R&D, Supply Chain and Finance organizations at all levels within the LATAM and EMEA Regions, but he is also experienced in several industries including Life Science, Healthcare, Insurance, Fintech, Technology, Telecoms, FMCG, Chemicals, Automotive, Energy and Mining. Since 2015, he has been researching and developing content in agile and resilience through Value Ways, while working under contract for customers such as MetLife, Novartis, Vertiv (Emerson NP) and Experian among others. Previously, he worked for more than 7 years as Master Black Belt for a LATAM-based consulting group, which had ASQ, Qualtec and Oriel as business partners. Prior to that, he worked for more than 10 years at BASF and GSK in positions of growing responsibility in the area of Operational Excellence. Marcelo is currently working at Ferring's “International PharmaScience Center” (IPC) for the Global R&D organization in Copenhagen. To find out more please visit www.value-ways.com.

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