Operating Model
A structure chart shows who reports to whom. An operating model shows how value actually gets created — which is a different picture entirely.
Aim
An operating model (business model) is the highest-level representation of how the organization delivers or fulfills what the target customer (audience) values. It answers the question: how will the organization deliver or fulfill what the targeted customer values? It is a depiction of the strategic workflow of the organization, and is sometimes also called a business model or delivery model.
Results
A visual representation of the organization's strategy and configuration that supports the marketplace strategy.
Pro Tips
- Don't think functionally. Operating models may imply functions and departments, but functions do not create value — processes do. The operating model should illustrate strategically how the organization creates value, not how functions are positioned on an org chart.
- Although other operating models can be used for illustration, starting with a clean sheet forces the required creativity and out-of-the-box thinking. Have each group member draw how they believe the new organization will work.
- Remind participants that it doesn't matter how it looks — just start drawing. Having each team member draw their ideas individually first helps leaders put their assumptions in front of their peers.
What good looks like
A clear picture of how value is created. Most times the team will know it when you get there — "that looks right", "that is great", or "that captures it, but we need to do some more work".