How to design a brilliant Target operating model
So your board or your CEO has given you a call and said: I need you to redesign our Target Operating Model. Where the hell do you start? In this video, I'm going to take you through the steps that you might start to
use in creating that Target Operating Model.
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So we got a call a couple of months ago from a business that wanted to change their Target Operating Model. They were VC backed, and they were going to run out of money in six months if they didn't change their
Target Operating Model. So there was a massive burning platform. And they asked us to come in and review it, and come back with an
implementation plan of what we would do and how we would do it.
So I'm going to share with you how we did it. Because if you take this easy plan forward, it can be adapted for any business. So when you're thinking about reviewing your Target Operating Model, we break it down into four stages. The first stage is Discovery. That Discovery stage is really looking at all the data points that you have. So your people strategy, your
values, your business strategy, the KPIs, basically everything that you've got that tells us what you're measuring and what you're valuing as an organisation. And that gives us in a way a straw person that we can draw up to use in the Insights phase.
Insights is all about really gaining deep insight by talking to people within your business. Now that can start at the top. So in this instance, we talked to the board, we talked to the leadership team, we talked to the leadership team's direct reports, to understand whether what we were seeing in the Discovery phase in terms of the data matched the reality of what people were saying.
So do people understand the purpose of why they're working in that
business? How important are the people? What are the KPIs that
they're going to be measured on? And is it all joined up? We then
replayed that, at the end of the Insights phase, to say here are some of the burning platforms and questions that we have. And then we built that into the third phase, which is Design.
The other aspect of the Insights phase was actually asking people
to look at polarity and positions. And then using a tool called the polarity map, we were able to look at the "as is" and the "to be" against a number of key questions, both from an organisation perspective, but also from a culture perspective, so that we could really determine what we'd found out in those interviews matched in terms of some of the harder data. And taking all of the data from the Discovery and Insights phase, we moved into phase three, which is all about Design.
And that was about designing the operating model and creating a board-ready report that would show not only structures – so do you have the
right people in the right roles doing the right thing – but also enabled recommendations against some of the key indicators or risks or opportunities. And that we played back to the board.
The final phase is when you've got the board on your side, and they really believe that this is the right operating model, and you kick the tires on it: it's Implementation. And that's how are you going to communicate that to the rest of the business - what's the timeline in which you're going to implement those changes? And that's where the magic ultimately happens. Because you've built up such a wealth of knowledge of the culture and the business imperatives, that now it's about moving it from a Target Operating Model project into a transformation and change. So
when you're thinking about designing your Target Operating Model, think about it in those four phases, Discovery, Insights, Design and Implementation.
You can't go wrong. If redesigning your Target Operating Model is one of
your burning platforms, we'd love to chat with you. We're really happy to share our four phases and show you how you might work in collaboration with us to take it forward.
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