What is an Operating Model

1. What is an Operating Model

2. Operating model and stakeholders • Business Partners • Core Employees • Owners • Target • Beneficiaries Operating Model Employee Offer Customer Offer Partner Offer

3. The components of an operating model POLISM P rocesses for delivering value O rganisation and people L ocations, property and assets I nformationsystems S uppliers and partners M anagement system

4. The Operating Model Canvas Locations Suppliers S L Value Delivery Chain(s) Value P Proposition Customer/ Beneficiary Organisation Information I O M Management System

5. Business model and stakeholders • Business Partners • Core Employees • Owners • Target • Beneficiaries Operating Model Employee Offer Customer Offer Partner Offer

6. The Operating Model Canvas addresses the back end Middle What? Front End For whom? Back End How? Key Partners Key Activities Value Proposition Customer Segments Customer Relationships Key Resources Channels Cost Structure Revenue Streams

7. The Business Model Canvas Suppliers Locations Front End (customers/channels) Back End (operations) Middle (value) Processes Org. Info Financial Model

8. High-level operating models Can do in a day Can do in a month Ten page Operating Model One page Operating Model Information systems The elements of the organisation that are most important for delivering the value proposition. Operating Model Canvas --------------------- Organisation chart Locations Processes Management system Suppliers The main operating activities that deliver the value proposition

9. Detailed operating models Can do in a 6 months Likely to take more than a year One hundred page Operating Model One thousand page Operating Manual OPERATING MODEL

10. There are many levels of detail ..

11. … when doing operating model work

12. Why is a high-level operating model needed • Strategy rarely says much about how. A high-level operating model converts strategy into the first level of how. • When implementing strategy, managers often have slightly different understandings of what is needed, influenced by their different functional perspectives. A high-level operating model helps keep them on the same page. • An operating model, when cascaded to lower levels, is a way of communicating strategy down to lower levels in the organisation and helps create alignment for level 4 decisions. • Strategies are often unrealistic. A high-level operating model provides useful feedback into the strategy process.