Operating model transformation: A mammoth undertaking with people at its core

Why does successful operating model transformation and design start with people and how can organisations secure success?

Operating-model-transformation-A-mammoth-undertaking-with-people-at-its-core-featured-image-Clarasys

Operating model transformation: A mammoth undertaking with people at its core

Why does successful operating model transformation and design start with people and how can organisations secure success?

Operating-model-transformation-A-mammoth-undertaking-with-people-at-its-core-featured-image-Clarasys

Meet the author

Archie Boyes

Consultant

Tom Carpenter

Principal Consultant

In the first of a two-part blog series, we investigate how successful operating model transformation and design requires leaders to make the case for moving people towards having a desire to change their mindset, behaviours, and ways of working. 

In an increasingly turbulent world, organisations are struggling to adapt to internal and external challenges. Pressures, such as technological advancement, heightened customer expectations and economic downturn, are proving unsustainable and ultimately terminal for organisations that cannot effectively adjust their trajectory and outperform competitors.

These significant socio-economic, environmental, and geopolitical shifts mean that both private and public sector organisations must be capable of responding to unpredictable and rapid change. However, in the private sector, only 28% of leaders agree that their organisation is structured in a way that enables them to respond to market pressures. The picture is even bleaker for many public sector organisations, with a significant majority of leaders indicating that highly prevalent hierarchical and rigid structures continue to create misalignment with policy, prevent effective response to change, and drive minimal innovation.

Getting an organisation’s operating model right is central to facilitating agile response to change whilst enhancing organisational health, cost efficiency, and creativity. When the operating model is aligned with strategy, teams will be more adaptable, motivated, and working towards the same goals. An aligned organisation will get the best out of its people, and its people will get the best out of the organisation’s strategy, executing on the needs of changing policy and direction.

Operating model transformation – it’s about people 

Effective operating model transformation is highly challenging and represents one of the most significant changes an organisation can experience. This need for an operating model transformation could be driven by many business factors, with these drivers often contributing to a common misconception that an operating model transformation is a technical problem that requires a simple shift in process, technology, and governance. 

However, organisations are not machines, they are complex and adaptive systems with a key differentiating factor – people. A successful operating model transformation relies 100% on people changing their ways of working, mindsets, and behaviours. Organisations therefore need to match this reliance on people changing with significant investment in supporting their people through this upheaval to their ways of working. 

Organisations that neglect their people during a transformation, risk disengagement and attrition, a 48% chance of staying on budget, and a 15% chance of success. By focusing on people first and prioritising getting engagement with employees right throughout the change, an organisation can maximise its chance of a successful operating model transformation.

Making your operating model transformation a success through people

Being clear on the why

Widespread buy-in and commitment are critical to making your operating model transformation a success. An organisation’s leadership must go all-in, being aligned not just on how the organisation will transform, but why the organisation is transforming. When leaders are aligned on the operating model transformation’s goals and reasoning, the transformation boosts its chances of success. If those driving the transformation are misaligned, this disconnect becomes intrinsic to the DNA of the new operating model. 

However, building buy-in doesn’t stop there. A successful operating model transformation cannot just come from the top, it must come from the organisation as a whole. Make the case for change to your people; show them why their organisation needs to operate differently and what this means for them individually. If the organisation understands the purpose of the transformation, you will not need to force change on your people. Instead, your people will help you make the transformation a success. 

Identifying what behaviours you need for success

You might be changing your operating model to enhance customer satisfaction, utilise a new technology, or reduce costs. Regardless of the reason, all operating model transformations rely entirely on your people behaving and working differently. For example, an organisation might want to organise around more agile ways of working, which relies on behaviours of (1) early visibility and response to regular feedback, (2) proactively driving progression, and (3) a focus on iteration and continuous improvement. Identifying what behaviours are needed – and how far the organisation is away from these behaviours – is critical for informing interventions that will help facilitate a successful operating model transformation. 

Pilot teams

An operating model transformation can be highly disruptive if not handled correctly. You won’t have all the answers when you design the operating model, and progressing the transformation without having each detail nailed down can feel daunting for people across the organisation. It is critical to judge when to build out the finer details of the transformation versus when not having all the answers is just a barrier to progression. Rolling out the transformation incrementally with pilot teams offers an opportunity to iron out any wrinkles and generate further buy-in whilst developing a blueprint for widespread rollout. You will build an understanding of what rate of change your organisation can handle and how best to support your people through the change. 

Champions and critics

Whilst you may have built an effective case for change with your people, not everyone will be equally bought into the operating model transformation. As the transformation progresses from a proposal into reality, people can gravitate towards one of two categories: Champions and Critics. Both of these groups are critical to the transformation’s success. 

Critics are more wary of the transformation and find it more difficult to adopt new ways of working. Listen to them – critics are often aware of vital information that may not have been initially considered in the operating model design. By leveraging constructive scepticism, you can enhance the benefits realised by the operating model transformation. Failure often stems from strong-arming the transformation and imposing change on your people – give critics the space to share and leverage their insight. 

Champions are highly enthusiastic and optimistic about the transformation. Identifying these people early can help you build momentum for the transformation and gather detailed feedback from people across the organisation. Build an empowered, cross-functional steering committee and give champions ownership in driving key transformation initiatives. Do this, and your operating model will be more successful. 

Do you need help with transforming your business or completing an organisational behaviour review?  Our people and change management services may be able to support you. To find out more, please get in touch.

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