The Ten-Component Operating Model

Operating Models · From the essay “An Organizational Chart Is Not an Operating Model”

A chart describes formal structure. An operating model describes coordinated action. These are the ten components a complete model must define, the handoff rules that hold them together, and the questions to test before approving a redesign.

The components

  • 01 Mandate & value
  • 02 Services & functions
  • 03 Capabilities
  • 04 Structure
  • 05 Processes & workflows
  • 06 Decision rights
  • 07 Information & technology
  • 08 Governance
  • 09 Partners & interfaces
  • 10 Performance & learning

Handoff rules

  • What must be complete before responsibility transfers
  • What information must accompany the work
  • Who accepts responsibility
  • How quickly the next stage must begin
  • What happens when information is missing
  • How exceptions are escalated

Questions to answer

  • What operating problem is the redesign intended to solve?
  • Does it change workflows, authority, or capability — or only reporting lines?
  • Have the organization’s critical handoffs been mapped?
  • Are decision rights clear at the level where the work occurs?
  • What information must flow between teams?
  • Which capabilities are missing?
  • What should be centralized, distributed, partnered, or automated?
  • How will performance be governed?
  • Which informal workarounds currently keep the organization functioning?
  • What must change in systems, budgets, incentives, and behaviour?