Thursday, 30 November 2017

Operating Model Building Blocks

Building Block #1: Autonomous and cross-functional teams anchored in customer journeys, products, and services

Successful companies constantly rethink how to bring together the right combination of skills to build products and serve customers. That means reconfiguring organizational boundaries and revisiting the nature of teams themselves, such as creating more fluid structures in which day-to-day work is organized into smaller teams that often cut across business lines and market segments.

Building Block #2: Flexible and modular architecture, infrastructure, and software delivery

Technology is a core element of any next-generation operating model, and it needs to support a much faster and more flexible deployment of products and services. However, companies often have trouble understanding how to implement these new technologies alongside legacy systems or are hampered by outdated systems that move far too slowly.
To address these issues, leaders are building modular architecture that supports flexible and reusable technologies. Business-process management (BPM) tools and externally facing channels, for example, can be shared across many if not all customer journeys. Leading technology teams collaborate with business leaders to assess which systems need to move faster. This understanding helps institutions decide how to architect their technology—for example, by identifying which systems should be migrated to the cloud to speed up builds and reduce maintenance.

Building Block #3: A management system that cascades clear strategies and goals through the organization, with tight feedback loops

The best management systems for next-generation operating models are based on principles, tools, and associated behaviors that drive a culture of continuous improvement focused on customer needs. Leading companies embed performance management into the DNA of an organization from top to bottom, and translate top-line goals and priorities into specific metrics and KPIs for employees at all levels. They make visible the skills and processes needed for employees to be successful, put clear criteria in place, and promote the sharing of best practices.

Building Block #4: Agile, customer-centric culture demonstrated at all levels and role modeled from the top

Successful companies prioritize speed and execution over perfection. That requires agility in delivering products to customers and quickly learning from them, as well as willingness to take appropriate risks. The best organizations have already made agility a cornerstone of how they work beyond IT. One credit-card company brought together law and compliance personnel to sit in with marketing teams to intervene early in processes and have daily conversations to identify and resolve issues. Law and compliance functions have also begun to adopt agile methodologies to change their own work. As functions and teams collaborate, they are on track to reduce effective time to market by 90 percent for some core processes while also reducing operational risk.

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