Van Haren Group
Operating Model Canvas: Aligning operations and organization with strategy
Operating Model Canvas describes a tool that managers can use to help them achieve alignment with strategy and with each other. It presents many examples from Uber to Shell to an IT function to a charity. It includes a toolbox of nearly 20 tools that help analyse and define an operating model. It also has two fully worked case studies.
The Operating Model Canvas dovetails with the Business Model Canvas. As Yves Pigneur, author of Business Model Generation and Value Proposition Design explains “Andrew Campbell and co-authors have focused on the left-hand side of the Business Model Canvas for creating an Operating Model Canvas.” Patrick van der Pijl, author of Design a Better Business added “This book is part of a family of books – Business Model Generation, Value Proposition Design and Design a better Business. They should all be in your bookshelf or on the side of your desk.”
An operating model is a document. It helps high level management to convert strategy into operational implications. Think of a building blueprint.
An operating model helps senior managers make operational choices. It helps the head of operations design the detailed work processes. It helps the head of HR decide what sort of people are needed to do the work and what sort of structure is needed to guide and control them. It helps the head of IT make decisions about IT architecture. It helps the head of supply chain design relationships with suppliers. So an operating model is an important step between strategy and all the decisions that need to be made to create a functioning organization.
A high-level operating model can be a single page. Of course there are operating models of 100 pages and operating manuals of more than 1000 pages. Though this book is about high-level models.
The Operating Model Canvas is a one-page model. For those familiar with the Business Model Canvas, the Operating Model Canvas covers the operating elements (Activities, Resources and Partners) with six elements that make up the mnemonic POLISM – Processes, Organization, Locations, Information, Suppliers and Management system.
Processes for the work that needs to be done to deliver a value proposition or service proposition to a customer/beneficiary: the value delivery chain. Organization for people who will do the work, the structure, the functions needed to support the work and the decision powers given to people in the structure. Location for where the work is done. Information for the software applications needed to support the work. Suppliers for those outside the organization whose engagement is also needed. Management system for planning, budgeting, performance monitoring and controls needed to run the organization.
It is possible to create an Operating Model Canvas for a multinational company, for a single business, for a function like HR or sales within a business, for a department within a function, for a charity and for a government body.
The book shows you how to create an Operating Model Canvas and provides dozens of examples of all different types of Canvases.
Chapter 1 – Operating Model Canvas
Describes the link with the Business Model Canvas and the role that an Operating Model Canvas plays in a transformation journey.
Chapter 2 – Operating Model Canvas examples
15 examples of real organizations from Uber to Shell to an IT function to Cardboard Citizens
Chapter 3 – Toolbox
18 tools divided between 5 core tools and 13 additional tools
Chapter 4 – Designing a target operating model for a business Fully worked example of a company in the business of supplying equipment to the electricity transmission industry
Chapter 5 – Designing an operating model for a function
Fully worked example of an IT function
Chapter 6 – Change examples
Six ‘as is’ and ‘to be’ examples that improved performance
• A manager in operations or in any function who wants to design how the operation works
• A CEO or COO or entrepreneur who wants to review his or her organization and plans
• A lean practitioner or process excellence manager who wants to be more strategic
• A manager in strategy or planning who wants to make the plans more practical
• A project manager or change specialist working on a transformation project
• A leader who wants to make sure her team members are all on the same page
• A business partner in HR, IT or Finance who wants to improve the business
• A business development manager who wants to design a new business
• A Business Architect, Enterprise Architect or Operations Strategist
• A manager tasked with cutting costs or improving service or quality
• A customer experience or user experience specialist
• A manager in charge of post merger integration
• A consultant helping organizations improve
• Anyone responsible for performance
Scope and constraints
• What is an operating model?
• The link between operating models and business models
• The link between operating models and strategy
• The tools of operating model design
• How to design a target operating model
• Fully worked examples of operating model design
• The role of an operating model in transformation