Your business has changed. Has your organisation changed with it?

7 days ago
4 min read

Think about how much has changed in businesses over the last five years. New markets have opened up, acquisitions have been made, products and services have evolved, technology has moved forward, and customer expectations have continued to rise. More recently, AI has created another wave of opportunity, while the pressure to improve productivity and manage cost has rarely been far from the leadership agenda.

Through all of that, organisations adapt.

New teams are created to respond to new priorities. Responsibilities move as the business grows. Processes evolve, additional controls are introduced, and new technology changes how some work gets done. An acquisition brings together different structures and ways of working, while growth creates roles and capabilities that simply weren't needed before.

Most of these changes are entirely rational. They solve a problem, respond to an opportunity, or help the business move forward.

The interesting question is what happens when you add them all together.

Over time, an organisation can become very different from the one its original operating model was designed to support. The strategy has moved forward, but the way work happens underneath it has evolved incrementally, and the two can gradually move out of alignment.

The signs aren't always obvious

Operating model problems rarely present themselves as operating model problems. More often, they appear as a collection of everyday business challenges.

Decisions begin to involve more people and take longer than they used to. Senior leaders find more of their time being drawn into operational detail. Responsibilities overlap between teams, or customers move across several functions because no one owns the outcome from beginning to end.

Elsewhere, costs may have increased without an obvious explanation; transformation programmes may be proving harder to deliver, or investment in technology isn't translating into the productivity gains the business expected.

There may be perfectly reasonable explanations for each of these things. But when several begin to appear across an organisation, there is value in looking at them together and asking a broader question:

Is the organisation we have today still designed to deliver the strategy we have today?

When good people compensate for complexity

One of the things we often see when working with organisations is just how effective people become at navigating complexity.

They know who needs to be involved to get a decision made, which part of a process can cause a delay and who to call when something gets stuck. They build relationships across functional boundaries and find practical ways of joining things together when the formal organisation doesn't quite do it for them.

That's a strength. It reflects the judgement, experience, and commitment of the people in the business. It can also make organisational friction surprisingly difficult to see.

When capable people continually compensate for complexity, the business can continue to perform while absorbing far more time and effort than it needs to. Eventually, leadership capacity is consumed by issues that could be resolved elsewhere; talented people spend more time navigating the organisation than creating value, and strategic priorities become harder to turn into action.

The organisation is still working. It is simply requiring more effort to make it work.

Why structure alone isn't the answer

When the pressure becomes visible, particularly when there is a need to improve productivity or reduce cost, it's understandable that attention turns to structure and headcount.

There are circumstances where reducing roles, removing layers, or restructuring teams is absolutely the right decision. But those changes are most effective when they follow a clear understanding of how the work itself needs to change.

If you remove people without removing or redesigning the work they were doing, that work usually has to go somewhere. If you reduce cost without addressing duplicated activity, unclear accountability, or unnecessary complexity, you may improve the P&L today without changing what created the cost in the first place.

Over time, some of that cost can find its way back into the organisation.

A Target Operating Model isn’t just an org chart reshuffle

True operating model alignment requires a complete functional model, backed by key design principles, aligned organisational structures, and the supporting processes and behaviours that make new ways of working stick.

A useful starting point is to understand how the business really operates. Where does work happen? How are decisions made? Where does accountability sit? Which activities genuinely create value, and which have accumulated because of the way the organisation has evolved?

Just as importantly, where is the organisation already working brilliantly, and what can be learned from that? This isn't about looking for more things to change. It's about creating the clarity to change the things that matter.

Design for where you're going

There is no single right operating model because there is no single same business challenge.

An organisation preparing for international growth will need different capabilities from one integrating an acquisition. A business looking to unlock the potential of AI may need to rethink how work, roles and technology come together, while an organisation facing cost pressure may discover that simplifying the work creates more sustainable value than simply reducing the number of people doing it.

What connects all of these situations is the need to start with the strategy and work backwards.

What does the business need to be able to do next, and is the organisation making that easier or harder?

That, for us, is what a good operating model should ultimately do. It should create the conditions for people to make good decisions, focus their energy where it adds most value and turn strategy into performance.

Because businesses will continue to change. The opportunity is to make sure the organisation is able to change with them.