What is an operating model example?

Use items such as tables, graphs, tables and maps. An operating model is a visual representation of the business model. It's the way an organization carries out its business model to deliver value to its customers. Business language is full of jargon.

Even worse, much of the jargon means different things to different people. And the place where these problems hang most is around strategy and how it should be executed. The word strategy itself has many meanings. The phrase strategic plan has even more interpretations.

Then there are words like goals, objectives, dashboards, and goals that are used in many different ways. The phrase “business model” has resonance, but no two managers or consultants use the same definition. The phrases “operating model” and “objective operating model” are no different. So let's start with a definition.

Therefore, an organization's operating model covers the parts of the value delivery chain in which the organization participates, as well as how the organization interacts with other participants. I use the word POLIST to help me remember the different aspects of an operating model that need to be addressed. In a nutshell, an operating model must show the work that needs to be done in the organization (P), the type of people and culture needed to do this work, how these people are connected in an organizational structure, how important decisions are made (O), where people and assets are located (L), how people work together across the structure and locations (I), what other organizations are needed to support the work (S) and how people are managed through regular planning meetings, budgeting and performance evaluation (T). Figure 3, The Operating Model Canvas, is a single framework for showing all of these different parts of an operating model.

The Canvas has a limited capacity, so only the highest-level thoughts can be included. For more details, separate graphs and models are needed for each section of the canvas. Figure 4 is an example of some of the high-level sticky notes that could be placed on the canvas if the operating model of McKinsey & Co, the global strategy consultancy, were summarized. Figure 4 — Canvas of the operating model for McKinsey Read more How to make new workplace behaviors contagiousContinue reading Beyond Moore's LawContinue Reading More Cuba Inc.

Open to foreign capitalists, but within limitsContinue Read more Up Scope — The Look AroundContinue. An operating model is a visual representation of how a company works. It includes everything from how the company obtains its products to how it structures its commercial areas and departments. An operating model serves as a model for executing your strategy.

With these challenges in mind, a new modern operating model is emerging to help companies close the gap in strategy execution and navigate a rapidly changing world. An operating model represents the way in which business components work together in accordance with the guiding principles of the system. Strategic business model planning describes products, service management, customer base, and key stakeholders. When creating or reviewing an operating model, it is necessary to fully understand the inner workings of each business area.

Any organization with more than a handful of people is likely to have specialists who focus on these support roles, in addition to the operational people who create and deliver the value. As such, optimizing your operating model is crucial for the effective execution of the strategy and the achievement of objectives. As we'll see later, every company has a unique operating model based on circumstances such as industry, size, and business maturity. This can also extend beyond the organization and encompass its ecosystem, analyzing how suppliers and vendors interact with their company's operations.

Let's look at the four different types of operating models and how they can interact with each other. They are mechanisms that help you navigate the business landscape and achieve strategic and operational objectives. For example, let's say you're reviewing your operating model because you're considering restructuring or reallocating resources. These elements filter into other areas of your business and, as a result, are incredibly important when working on your model.

An operating model, on the other hand, establishes how a company will work to deliver that value. When you adopt the role approach, you design your operating model based on the hierarchy and roles within your company. .