Firms are full of concepts – ideas that drive the business forward – like profit, reputation and new products. Some concepts are tangible, like invoicing. Others, like customer satisfaction, are not. Concepts are linked. Each concept influences one or more other concepts. Managers must understand this influence in order to develop initiatives and drive change.
An operating model is a diagram in which all of the important concepts and all the important links are shown. It’s a big description of how the firm does what it does. All firms have a unique operating model – but most are incomplete, un-optimised and in managers’ heads. The operating model must be expressed and agreed. Only then can improvement and change be planned.
Processes give firms structure. They make firms work. Managers translate concepts into processes. Processes demand human competencies and behaviours and they demand technology function. Competencies, behaviours and function give the firm its capability.
Improvement and change in capability come from initiatives to alter competencies,
behaviours, function and structure. All of this gets expressed in an operating model.
The building of an operating model, with its processes, competencies, behaviours, technology function and structure, is hugely enlightening for client managers. But exercising this model to develop plans is truly mind-blowing. Our consultants are adept at modelling. They have the skills, knowledge and experience to work with you and your senior team.
Simple Operating Model
The model below shows a basic operating model for a simple commercial firm that promotes its products, sells, delivers and invoices. But even with this simple model there are usually some startling revelations.
Continuously pushing performance through marketing is hard work. This ‘push’ marketing is made much more effective if reinforcing loops are introduced – if the firm takes steps to build its reputation and innovates new products. Marketing then becomes ‘pull’ too.
We’re sure to find huge revelations when modelling your operating model.
Our workshops aim to build and agree the operating model. But our workshops also seek completeness, expanding the operating model to what our client managers agree it should be – and what they want it to be for business success.
Finding the potential reinforcing loops is a key part.
We’ll discover unique reinforcing loops that will benefit your firm too. Reinforcing loops differentiate your products and services and build your competitive advantage.
Exploring the Possible
Our models will reveal possible structure change, process change, succession plans, job re-design, recruitment, new technology acquisition and staff development needs. You’ll see gaps you didn’t know you had and identify areas of possible divestment, mergers, acquisitions and collaborations.
And the process of model development serves as development for the senior team, resulting in managers who know what to do, when and why.