Today’s operating models are better suited for a time when the major competitive strategies were focused primarily on either scale or local responsiveness. The conventional wisdom: Companies couldn’t do both.
Yet there are players that prove scale and responsiveness aren’t mutually exclusive. How do they do it? By gaining competitive agility through operating models that continuously keep pace with the market. Accenture Strategy research shows that agile organizations have 16 percent long-term EBITDA growth compared with six percent for non-agile organizations.
Essential for gaining this level of agility: Embracing five characteristics and making them part of the operating model DNA: Human. Liquid. Enhanced. Living. Modular.
Five characteristics of the operating model DNA:
Agile organizations have 16 percent long-term EBITDA growth compared with 6 percent on average for non-agile ones
When it comes to pursuing ecosystem business models, many organizations face a gap between their ambitions and capabilities.
Human. Liquid. Enhanced. Living. Modular. These characteristics will transform operating models from static and mechanistic to flexible and fast, through individual empowerment guided by purpose and driven by data. There are no prescribed routes to start the journey, only guiding principles.
Principle 1: Find the combination of characteristics that work for you. There is no one-size-fits all answer for flexing your operating model. Leaders need to find the model that serves their strategy and organizational context. What’s more, one combination of characteristics that’s right to address a specific part of your business may not apply across the organization.
Principle 2: Pick your path to evolve and transform. There are multiple pathways when it comes to adapting your operating model for the long haul. What do they all have in common? They’re iterative and use the power of data and design thinking to steer the course. These range from experimenting in targeted areas before scaling. Or resetting a function: More and more companies are using a clean-sheet design to fundamentally re-think their organizations.
Principle 3: Get clear with your structure. The new tenets of an agile operating model don’t spell the end of hierarchy. In fact, clear rules and codified ways of working underpin agile organizations. But each component of the operating model needs to be redesigned and re-wired: Governance, structure, technology, process, etc. Doing so requires a new way of leading and managing the organization.