how to sharpen up your operating model to achieve your goals
Tap into the power of choice and reduce interference
The noise around us is growing. With the paradox of choice ever more prevalent in decision-making, the options are less clear. Making the right choices is vital to achieving your organisation’s goals. These are the decisions that propel you forwards rather than sideways, or even backwards. So how can you know you’re making the best strategic and tactical choices in the face of constant, potentially destabilising change?
Create space for growth
Everyone wants to grow, and everyone wants to cut costs in this tough economic climate. Fortunately, the two go hand-in-hand. By removing organisational noise, or interference, you become more operationally efficient, reducing cost and increasing focus. This creates the space for growth.
In his book The Inner Game, Tim Gallwey provides a formula to use when coaching individuals: Performance = Potential – Interference. This can equally be applied to organisations. It is the constant interference within organisations which is both draining and destabilising. And if we’ve learned anything in the last two years, it’s that we can make difficult choices fast when a crisis hits, cutting out interference to get the work done. Now it’s time to use this skill to sharpen up your operating model, removing the interference that blocks growth, efficiency, employee satisfaction and, ultimately, financial performance.
Pinpoint your potential
To understand at a high level what your organisation interference is, ask yourself on scale of 1-10 how good your organisation performance is right now. List all the strengths you believe contribute to this score. Now think about your organisation’s potential. What do you want this number to be? What other strengths would help you achieve it? Finally, think about interference. What structures, behaviours, processes, ways of working, and capability gaps are blocking your potential and preventing you from reaching your desired performance?
Articulate your choices
Interference happens at all levels of an operating model, from the strategic choices that define your customer value proposition to the choices you make about ways of working. The list you’ve just created probably contains a mix of strategic and operational interference. To remove the interference, you need to understand what causes it and then make choices. These choices are your key to a streamlined operating model which will drive focus, efficiency and growth. They are often hard to make, but indecision and compromise underpin the interference impacting your potential. These choices can be game-changing.
In the context of strategy and operating model, a good choice articulates both what you will and will not do, spelling out the implications of each.
Here are a few examples of strategic choices:
Is your value proposition designed for operational excellence or customer intimacy – are you a McDonalds, with stable, repeatable, reliable processes, where variation kills efficiency; or a Saville Row tailor whose brand and customer experience is defined by variation?
Is your organisation targeting future growth through acquisition or organic expansion? Acquisition requires the capabilities to target companies where synergies can be realised, and to rapidly integrate and maximise their potential. Companies like Microsoft have invested heavily in this strategy with acquisitions of organisations such as LinkedIn. Organic growth prioritises effective customer relationship management and service offer development, sales capability and operational efficiency. Apple, for example, have for the most part grown with this approach.
Will your support functions deliver better if centralised or decentralised? Centralisation enables a unification of planning and approach, and common decision making and resource efficiency (but can also stifle creativity and drive bureaucracy). Decentralisation promotes personalisation, localised problem solving and responsiveness (but can result in duplication of effort and process variation).
Are customer services teams designed as generalists (multiskilled and able to serve most customers first time), requiring broad capability development and experience to provide a simplified customer experience? Or are they specialists trained to handle specific types of queries (but will likely get it right first time), making recruitment and induction simpler but resulting in transfers and hand-offs in the customer journey?
In each of these examples, both options are viable choices. But fail to articulate your choice clearly and you’ll be left with competing priorities, blurred boundaries, unclear processes, and confused roles and responsibilities. Your customers may be left wondering why they would choose you. Of course, each choice also comes with a trade-off (cost, customer delight, etc) but when you are consciously aware of this, you can manage it.
Understand the issues
By the very existence of your organisation, you have already made a choice on your customer value proposition and probably your organisational operating model too. But it’s the next level of detail that causes the most noise. If your list of interferences is still troubling you, explore each one using this approach:
Start by articulating the problem you have to solve, framing each issue as a constructive inquiry. For example, you might express a key interference as ‘we don’t have the right skills and capabilities in the business.’ Reframe this as ‘how to ensure we have the right skills and capabilities in the business.’ Or the issue could be ‘third party providers are not delivering as hoped.’ Reframe this as ‘how to clarify the role of third party providers.’
Challenge yourself to identify the root cause of this issue. For example, is it a training and development, or a talent acquisition issue? Is it a poor choice of partner or a misaligned set of expectations?
On a single continuum, outline the strategic choices: express these as sliding scales which highlight the viable extremes. And remember, both extremes should be real choices. In these examples, on the left of your sliding scale you might have ‘develop in-house capability’ and at the opposite end, ‘sharpen our Employee Value Proposition and recruit.’ For the third-party provider, you might have at one end, ‘partners as a delivery vehicle,’ and at the other, ‘partners as strategic support with shared accountability.’
Then mark where you are today and where you need to be in the future. Do this with key stakeholders, individually, to avoid the psychological bias of herd mentality.
For the future scenario, discuss the practical implications of this choice. What will change? How will it change?
Now overlay stakeholder input. You’ll find one of two things: alignment – great, you’re aligned, the way forward is clear – or lack of alignment. The latter may come as a surprise, but understanding what’s behind it will help you to understand what is causing interference. It’s critical here to be clear on who owns the decision to move this forward.
Implement a carefully tailored change programme
Armed with clarity on your choice and its implications, your next challenge is execution. This is best done with the momentum of the organisation behind you. Change itself is interference in the day to day running of any organisation, until the change becomes business as usual. So, it’s critical to invest time in carefully planning and implementing change, tailored to how change-ready or weary your organisation is.
The path will be different for every organisation. To understand where you need to focus your efforts, answer these questions on a scale of 1-4, where 1 is ‘we don’t do this at all well’ and 4 is ‘we’re great at this’. Your answers will define what you need to address in your implementation approach.
Before you start to implement change:
How far do we create a positive climate of support and encouragement?
How clearly do we define the problem we have to solve?
How clear are we about what the end state looks like?
How good are we at telling the story of why we have to change?
Once you are in the midst of implementing change:
How realistic are we about resources, timescales and dependencies?
How far have we connected with and mobilised the individuals in our organisation?
How clear are we about the new habits and routines that we need to adopt and practice?
How far do we understand and manage our personalities, emotions and biases?
Done well, change stops being the interference and becomes the enabler of performance. Can you afford not to change?
You may also be interested in our fun take on how to avoid operating model pitfalls
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More about the author
Hannah Crossley
Hannah Crossley is an operating model expert, with over 15 years’ experience working with clients to help them define their strategic and tactical choices and configure organisations to achieve their ambitions
