The Transformation Journey from an Idea to its Ongoing Operational Success
TOM - Understanding the Basics
The concept of a strategy to execution journey that follows a series of interlinked phases:
- Strategy Formulation
- Operating Model
- Development
- Implementation
- Operational Control and Feedback
Overview
The Transformation Journey from an Idea to its Ongoing Operational Success
Historically the above steps were presented in a rigid way.
One developed a strategy – a set of goals for a journey, then designed a delivery model and then implanted it in a very sequential “waterfall” approach.
This often took a long time and no longer reflected market conditions by the time the transformation was completed
The final phase of control is frequently overlooked; the basic requirement here is ensuring that your operating model stays on course within business-as-usual activity delivering the strategy.
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Table of Contents
In this guide you will learn.
The Business Model Canvas of course has its limitations and isn’t perfect, but one has to say it has been really successful in getting executives to think about how their business “ticks or could tick”.
Introduction
Fluidity Between Phases
There has in recent times been a strong recognition that, although described as phases or stages, there is fluidity between the phases with some overlap, repetition or iteration; both back and forth across the phases, and up and down in the levels of detail where, as is well known, “that the devil is in the detail”).
A key improvement we have seen are the development of tools and techniques that are readily accessible and simply explained; one approach in particular is the use of “canvasses”.
Business Model Generation
The Business Model Canvas Became a New “Strategy Statement”
Business Model Generation
In 2010 Alex Osterwalder published his now well-known book Business Model Generation using the idea of a canvas, a pre-set template to stimulate structured thinking.
The book, published in a colourful landscape format was highly visual, low on text and gave numerous examples of how to apply its ideas. The business model canvas became a new “strategy statement” to accompany the more traditional statements of vision, mission and goals.
It gave focus to the creation and grounding of a business model as a way of showing how value was created and delivered to stakeholders.
It is one way of expressing how value generates revenue and how costs are created by serving that value creation – a business model.
The Business Model Canvas of course has its limitations and isn’t perfect
But one has to say it has been really successful in getting executives to think about how their business “ticks or could tick”.
One point coming out of this was that the left side of the canvas – the cost creating part – was the operating model.
Costs constrain the way value is delivered, and the two sides have to be in balance.
One informs the other and vice versa, therefore presenting a circular repeated piece of thinking that gets more confirmed as different ideas are tried out and tested.
The canvas helps us by suggested “links” and connections.
All these prompts thinking which is really helpful for people starting out in this type of skill set.
Others have added arrows and action words on lines between boxes on the BMC canvas providing a more explicit and better understanding of the mechanism of delivering value.
Since 2010 the BMC has been modified and added to and has been applied to organisations beyond its original target of the profit centred firm.
For all its advantages, the Business Model Canvas lacks the crucial ‘how to actually do it’ element.
The BMC is only at the high level – too high level some critics say – only having the two zones of key activities and key resources to address the operating model; these are not nearly enough from an operational perspective. One does really need more detail to inform whether the operational practicalities fit in to deliver the business case, the cost element, for the proposed business model.
Enter the Operating Model Canvas
The brevity of the two zones and the need for greater focus in the operation led to the Andrew Campbell et al (2016) publication of the same name.
A similar style of book, again in landscape, colourful and text light, it uses six themes:
POLISM
- Process
- Organisation
- Location
- Information
- Suppliers and
- Management Systems
to structure operating model design .
The emphasis presented in the book was the flow of value and how each category assisted that flow.
It leaves the value to be defined elsewhere; it simply gives focus to how the operation serves that value.
The book describes an eclectic mix of thirteen supporting tools without going into details of how to do this work at a practical and ground level.
Just to point out, splitting the operating model into themes or zones is not new.
CCPPOLDAT
- Customer
- Channel
- Product/Proposition
- Process
- Organisation
- Location
- Data Application and Technology
served us well since the early 2000s and still does as a structure for operating model work.
Although Andrew Campbell presents the Operating Model canvas as “plug in” to replace the Key Activities and Key Resources in the Business Model Canvas, it is not really necessary to have a BMC as a precursor.
The absence of a clear, logical and easy to understand A to Z approach to transformational activities from strategy to ongoing operational improvement complicates decision making and reduces the chances of success.
Importantly for organisations and decision makers, the absence of clear transformation project A to Z roadmap hides the costs, diminishes employee engagement and risks client attrition; it makes fluid ‘agile’ approach to transformation effort impossible.
Thinking About The Operating Model
Key Themes Can Significantly Enhance the Development of the Operating Model
POLISM
The Six Themes of POLISM and their value in modelling:
- Process
- Organisation
- Location
- Information
- Suppliers and
- Management Systems
CCPPOLDAT
The Nine Themes of CCPPOLDAT and their value in modelling:
- Customer
- Channel
- Product/Proposition
- Process
- Organisation
- Location
- Data Application and Technology
Does CCPPOLDAT do the job of both the BMC and the Operating Model Canvas?
It is an alternative approach and has its merits too.
As contributing authors to Andrew’s book, Kirill Derevenski and David have published six companion articles each taking an Operating Model Canvas Zone and looking at how each aspect affects both the cost and value models.
These assist the practitioner to “drop down a level” beneath the high-level conceptual ideas of how to operate, starting to flesh out the practicalities rather than staying in the “consultancy plane”.
Interating The Model
In tying back to our original statement that rework and iteration are essential in this sort of work, only once you explore the practicalities and detail of the operation can you be certain that the costs fit with the original business case.
Indeed, in many cases the transformation team has to revisit and modify its high-level ideas once the real outcomes are understood to some depth.
Knowing What One Wants to Achieve
In fact, just knowing ‘what one wants to achieve’ is often enough to start working on operating model design!
Regarding Implementation and Control & Feedback themes of a transformation journey several models exist, too.
But herein lies a problem, in most instances, these too are discreet and stand-alone ‘modules’ not directly connected to phases before or after them
Both Business Model and Operating Model Canvases are just “jigsaw puzzles” in the overall transformation activity.
To succeed, they must have a head (Strategy) and a tail (Implementation), all seamlessly connected into one narrative.
Over the course of next months, this is what David will be working on to make things real and practical for our clients and the operating model space in general – so stay tuned!
The Operating Model - Key Features
The Operating Model and Its Modelling Themes Give You Very Flexible Frameworks to Articulate Your Target Operating Model
The Key to Success – Integrating Strategy and Implementation
Success is a balance between strategy and implementation, seamlessly integrated into a cohesive narrative.
Tools like the Business Model Canvas and Operating Model Canvas exemplify this, offering structured approaches to align strategic objectives with operational execution.
These frameworks enable organisations to clarify their goals (the “head”) and plan execution (the “tail”).
When combined with methodologies like POLISM (Process, Organisation, Location, Information, Suppliers, and Management systems), businesses can ensure every element of the operating model works in harmony, avoiding silos and gaps.
Bridging the Gap with Practical Frameworks
Turning strategy into action often stalls at the implementation stage. Leveraging tools such as CCPPOLDAT (Capabilities, Processes, People, Organisation, Locations, Data, Applications, and Technology), businesses can translate strategy into clear, actionable components.
These frameworks deconstruct complexity, ensuring each layer of the organisation supports and reinforces strategic goals.
Over the coming months, David will focus on practical applications of these models, developing insights and solutions that directly address real-world challenges, particularly in aligning business aspirations with day-to-day execution.
Practical Solutions for Sustainable Success
The integration of frameworks like the Operating Model Canvas and methodologies such as CCPPOLDAT and POLISM will drive David’s Target Operating Model Guides in the coming months.
These tools ensure organisations don’t just plan but act with precision, transforming abstract strategies into measurable results.
Expect updates showcasing how these frameworks can optimise operating models, enhance adaptability, and create sustainable pathways to success.
Stay tuned for insights and practical tools to help guide effective TOM construction and execution.
Common Misunderstandings About TOM
Despite TOM’s broad applicability, misconceptions can lead to underutilisation. Here are some common misunderstandings
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Misconception 1: TOM is Only for Large Corporations
While large corporations frequently implement TOM, small and medium-sized businesses can also benefit. TOM provides clarity and structure, helping organisations of all sizes to work efficiently and sustainably.
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Misconception 2: TOM is a Static Framework
TOM is not a one-time project but an evolving model. Organisations should revisit and adjust their TOM as markets, technology, and strategies change.
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Misconception 3: TOM Only Focuses on Processes $32
While processes are essential, TOM also addresses technology, culture, and structure. Each component plays a unique role in supporting organisational goals and enhancing operational efficiency.
Case Studies: TOM in Different Industries
Let’s explore how different sectors use TOM to achieve alignment and efficiency:
Finance
A financial institution may use a TOM to enhance compliance and operational efficiency amidst changing regulations. By aligning its workflows with regulatory requirements, the organisation maintained seamless service delivery while meeting compliance standards.
Retail
A retail chain facing rapid expansion could use a TOM to manage inventory, logistics, and customer service. By structuring these elements within TOM, the company improved delivery times and customer satisfaction, supporting its growth objectives.
Healthcare
In healthcare, a national hospital network could implement a TOM to standardise patient care protocols. By aligning clinical processes, technology, and culture, the network reduced patient wait times and improved overall care quality.
Conclusion: TOM as a Framework for Strategic Consistency
A Target Operating Model provides organisations with a comprehensive, adaptable framework to align their operations with strategic goals.
By clearly defining components like processes, technology, and structure, TOM helps organisations create an efficient, cohesive model that supports sustained growth and operational success.
Whether during expansion, technological adaptation, or structural change, a well-designed TOM ensures that each part of the organisation operates in harmony with the broader mission. This clarity, efficiency, and adaptability make TOM a valuable tool for any organisation aiming to achieve both strategic and operational excellence.
Further Resources
Want to explore how a TOM could transform your operations?
- Useful Links
- Chris Fox , of StratNavApp, our Strategic Partner, explains how TOM fits into a strategy
- Take a look at The Sixsess Consultancy’s “Insights” Blog
- Join us on one of our residential courses or call us to arrange your own organisation’s bespoke in-house Target Operating Model course
Barry Eustance CMgr MCMI
Principal Change & Transformation Consultant
