RESEARCH REPORT

In brief

In brief

  • Three quarters of businesses report an increase in the disruptive impact of constantly shifting customer demands and new market entrants.
  • Yet their operating models aren’t changing at pace. Most are too big, too slow and too expensive to be effective.
  • Companies can improve their agility by making five characteristics part of their operating model DNA: Human. Liquid. Enhanced. Living. Modular.


Agility pays

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.

Move fast to thrive | Intelligent operating model | Accenture

Accenture's video shares how can companies improve their agility by making five characteristics part of their operating model DNA. See more.

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Five characteristics of the operating model DNA:

Human

How can big incumbents get nimbler? They need to start by designing around humans and what they care about, from employees to end consumers. With a culture that promotes authenticity and continuous learning to deliver on a purpose—one beyond a pure profit motive—that keeps the best employees and customers. This lays the foundation for the other characteristics: Liquid, enhanced, living, modular.

Liquid

Before the dawn of digital, operating models used to be about building walls and keeping an organization impenetrable. Now competitive muscle comes as much from what can be harnessed outside—across partners, suppliers and adjacent companies—as it does from what’s within. Leading companies are building structures that are porous and liquid to seamlessly access people, processes, systems and assets from anywhere.

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Enhanced

Continuously adaptive organizations ensure that humans and machines enhance one another. They empower people and automate lower-value activities. They employ machine learning to transform core linear operating processes into non-linear ones that can dynamically respond and evolve. And they harness the power of technologies to make the workplace a strategic platform to drive productivity and wellbeing.

Living

With the help of new technologies and unprecedented levels of transparency, organizations can create entirely new, more flexible ways of structuring and organizing work to adapt to the market. Nimble, self-organized teams―more “organism” than “organization”―prioritize progress over perfection, with a willingness to disrupt the status quo to act at a vastly accelerated pace.

Modular

Modular organizations create independent, discrete businesses or capabilities that can be “plugged and played” at will based on well-defined, standardized interfaces. These players can enable multiple operating models under one company to respond faster to their customers and more quickly and effectively partner with the wider external ecosystem to enhance or drive new offers, platform-based businesses and faster innovation.

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Agile organizations have 16 percent long-term EBITDA growth compared with 6 percent on average for non-agile ones

A bar chart showing EBITDA growth of agile organizations is 16 percent, compared with just 6 percent for non-agile organizations.

10-year EBITDA growth (2007-2017)

When it comes to pursuing ecosystem business models, many organizations face a gap between their ambitions and capabilities.

84%

of executives say ecosystems are important to their strategy.

40%

possess the capabilities and organizational model to accommodate them.



Guiding principles

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.

About the Authors

Diana Bersohn

Managing Director – Accenture Strategy, Technology Strategy


Till Dudler

Managing Director – Accenture Strategy, Consumer Goods & Services, Europe, Africa, and Latin America


Paul Jeruchimowitz

Managing Director – Accenture Strategy, CFO & Enterprise Value


Kent McMillan

Managing Director – Accenture Strategy, Talent and Organization

Contributors

Roger Elli​son

Senior Manager – Accenture Strategy


Benjamin Gaunt

Senior Manager – Accenture Strategy


Sanam Gill

Senior Manager – Accenture Strategy


Tim Henshaw

Senior Manager – Accenture Strategy


Samuel Holmes

Senior Manager – Accenture Strategy


Alessandra Zanetti

Senior Manager – Accenture Strategy

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