Turning strategies into reality

A ‘fit for purpose’ operating model

Organizations today face many pressures to ensure that their way of operating and their structures are ‘fit for purpose’ to enable them to achieve their goals and satisfy their many stakeholders. Many of the pressures to reshape their operating model seem to be in conflict, so business leaders are faced with the dilemma of resolving a series of potential trade offs amongst competing priorities. They may want:

  • Self-contained business units where entrepreneurial capabilities can be unleashed and competitive advantage maximized. But they also want to grasp the synergies across these business units to reduce costs, apply best practice and deliver consistent services
  • Centers of functional expertise that can not only deliver the transactional activities at lowest cost and greatest consistency, but also be a source of functional excellence, delivering advice and value to the business
  • Corporate centers that can provide the right level of ‘parental’ guidance and control across the portfolio of businesses, while not constraining the creativity and speed of decision making required to respond to market opportunities

The operating model focuses on activities and processes – not structure.  It attempts to answer a number of fundamental questions about which activities and processes need to be performed in order for the organization to deliver value to customers, partners, and other key stakeholders.  It also addresses where these activities should be performed, and how they should be managed and controlled.

Hay Group will work with the executive team to:

  • assess the current operating model’s ability to support implementation of the organizations strategy. The approach looks at the whole organization ‘from the outside-in’.  Detailed operating models are developed for specific parts of the organization, and the overall operating model is constructed so as to support these component models
  • develop and assess alternative ‘to-be’ operating models, based on the agreed-upon strategy, business models and diagnostic insights, resulting in a ‘best fit for purpose’ model.
  • provide a set of organizational principles and criteria, which are then used to guide the design of future organization structures.