Expand on the strategy through your target operating model
Once you have a practical strategy defined, then you go to the next level of definition. That is to take a good hard look at your existing way of going to market and how you deliver service to customers through your operating model. An independent review asks questions around your customer segmentation, how you service your customer with your delivery channels, how you make or purchase product, how you create returns through your operating model, etc. Your operating model can be mapped to your value chain and misalignment, inefficiencies, poor market focus, wasteful allocation of resources, etc. can be quickly identified.
Many facets need to be reviewed in looking at your operating model. Typically you need to review your markets including customer segmentation, sales channels, supplier strategies, product categorization, and branding. Operations are reviewed looking at the engagement between all relevant stakeholders, process design, systems, assets and resources, governance and decision making, and organizational design. The people aspects such as culture and values, skills development and deployment, performance management, and talent management are all reviewed. Lastly, critical success factors, key performance indications, and results management are reviewed and aligned to the desired strategy.
Adjustments to the operating model can now be identified and made to the reality of the market and operating environment. There is no one answer for all organizations just as there is often no right answer – there is only what you and your management team feel is the best way to address a problem.
Once your review is complete you will have a list of initiatives that need to be addressed to optimize your operating model. You can implement some of these immediately. Others will take time and effort. These can then be turned into projects, prioritized and scoped, and executed with dedicated resources and expected outcomes. You are now delivering your strategy through distinct and measurable projects. In this way, I believe the target operating model is a key tool in enabling strategy.
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