Operating Models That Convert Strategy to Results
Redesigning an organization's operating model may be one of the wisest investments leadership can make to realize growth objectives. The best operating models ensure that organizational structure, accountabilities and governance – along with the right people, processes and technology – all work together to support strategic priorities. According to the authors, several factors have heightened the need for operating models to evolve in the last few years; the same principles could be applied to nonprofit organizations. The primary driver is the pursuit of growth (product offerings and geographies), which has led to increasingly complex organizational structures that often slow decision making. When that happens, it becomes imperative to step back and take a wide-angle view of the entire organization to pinpoint elements of the operating model that are not working in harmony.

When a need for change is present, executive leadership cannot afford to constantly be rewiring its organization to execute new game plans. At the same time, though, leadership must be able to adapt to rapid change in the market. Organizations with superior execution follow four best practices that enable them to build models that meet their current objectives and also allow them to flex as new priorities emerge. One, make sure the operating model closely fits the organization's mission. Two, always put customer or member priorities at the center of the design. Three, organize the organization’s resources to develop and deliver the capabilities that matter most. Finally, motivate and align staff not through exhaustive rules, but through clearly defined operational principles.

At times, it can be obvious when an operating model must be changed. However, it is not always evident. A number of questions can help you determine whether or not a partial or full redesign may be needed. They include:
  • Is your organization set up to capture the biggest growth opportunities?
  • Do your leaders commit the right focus and time to the top strategic priorities?
  • Does your organization have a culture of accountability and collaboration to enable effective execution of plans?
  • Do your leaders make decisions at the pace required by the market, or are they held back by a constant swirl of revision?
If the answers to any of these questions cause concern among board members and decision makers, it may be time to revisit the operating model to ensure that it is providing a "sturdy bridge" between execution and strategic ambition.
Bain & Company (12/10/14) Blenko, Marcia; Garton, Eric; Mottura, Ludovica
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