The Future of Operating Models


By Lydia Loh

Photo by Octavian Rosca on Unsplash

What is an operating model and why consultants love them so much?

Often when we are asked by clients to solve their business problems, we have a matter of days to get up to speed with the organisation and their unique situation. There have been times where we have been pushed to the limit of how well we understand organisations; but an operating model design mindset has helped see us through!

An operating model can be defined as the:

‘Articulation of how parts of an organisation work together to create value and achieve its vision’

As an aside, an operating model will interplay with the ‘business model’, which encompasses the market-facing strategy of how your organisation will make money from a pricing, product and propositional point of view.

At Deloitte, we work to find frameworks, methods and tools to help our clients frame opportunities, navigate challenges and embed change more effectively and quickly. After supporting many organisations, we have found that the ‘value chain’ lens is currently helping accelerate this for our clients the most.

Finding an operating model framework that moves organisations into the 21st century

Framing the way an organisation ‘creates value’ can help leadership cut through the complexity of politics, legacy architecture and help focus their team members on the main task at hand. The framework will:

Image created by author

Our operating model framework

By combining the above nine principles, we put together the following operating model framework — a series of value chains or ‘layers’ that help organisation leaders conceptually depict how different levels of their organisation interact to make sense of what is happening.

Moving left to right, the framework enables you to articulate what your organisation does to fulfill its strategy more tangibly — the why, who, what and how.

Image created by author

We can then use delivery infrastructure such as teams, governance, technology and data to ‘clad’ the framework and bring the organisation to life. Deloitte has a complimentary suite of transformation methods and tools that can be combined with the framework to enact change.

What can your team get from an operating model design mindset?

This framework has proved effective in helping our clients frame, diagnose and solve some of their most challenging issues; we’re confident it can do the same for yours. Here’s an overview of some of the most common challenges we see our C-suite clients facing and where the operating model design mindset can prove of value in aiding decision making:

Image created by author

This doesn’t mean to say all organisations can or will be structured in this way, however if every member of your organisation truly thought like this, just imagine the value you could create together. At the very least it would prove a good foundation for your organisation’s success in this digital, tech-driven age.

Join us next time …

This article has provided a taster on how we, at Deloitte, come to understand and diagnose issues in your organisation rapidly. As organisations evolve to become more digitised and tech-driven, the way their businesses function, are designed and improved must change too.

If you’ve enjoyed this article, why not explore our further thoughts on this topic; from accelerating transformation, to digital twin simulation to organisational psychology to investment optimisation and thoughts on how Tech firms have been leveraging value creation for years.

By Lydia Loh — Operating Model Designer at Deloitte NSE