High-impact operating model design in action

Part 2: Realizing the ultimate influencer

Posted by Tiffany McDowell, Uzair Qadeer and Julia Rudansky on September 29, 2017.

In part one of our three-part series on designing operating models for high impact, we looked at the role of operating model design in driving and supporting the behaviors necessary for a desired business outcome. Here we look at examples of how operating models influence behavior and where the discussion of behaviors fits in the design process.

We can see a clear example of an operating models influence on behaviors by looking at two socially, geographically, and politically similar nations: Canada and the United States. Both nations are driven by similar political mission, vision, and values, but how each nation governs within these philosophical parameters differs dramatically. Neither the governing institutions nor the underlying democratic vision supporting these governments are responsible for these varied outcomes. Rather, the way in which the components of government work together—that is to say, the country’s operating model—determines how the respective nations deliver on their promise to govern.

Both nations have a constitution: Canada a constitutional monarchy and the United States a republic. Canada is governed by a parliamentary cabinet and the United States is governed by three branches of government. These structures determine both the decision-making process and the behavioral outputs of each government. First, the operating model influences the roles politicians play in each country as they tackle the same legislative issues. Second, if a controversial bill becomes a law, the process to repeal this law also differs remarkably between the two democratic neighbors. Finally, the government’s operating model has a fervent trickle-down impact on how most citizens view the role of their government and their relationship with their government. Citizens of these two nations tend to view their relationship to the government very differently and thus may arrive at dramatically different conclusions for identical socio-political topics. For example, despite both nations being developed Western economies with democratic governments, universal access to health care is a widely accepted idea in Canada, while in the United States it remains a contentious issue. The operating model is a true behavior influencer. It instructs people on ways to execute processes, cohere information, formulate viewpoints, and establish norms within the system.

Operating models’; undeniable influence on behaviors

When building a house, the strategic architecture and design choices influence how the inhabitants ultimately feel and act in their home. This is true for organizational design choices as well. The operating model serves as the building blocks that influence the operation. Alter the placement of one block, and you will alter the resulting behavioral outcomes. For example, the impact of the placement of organizational blocks can be seen in a global organization that chose to redesign into regional buckets. Due to the new structure, people eventually stopped worrying about happenings external to their own region. This environment became comfortable, creating unwanted siloed behaviors. Once employees worked within the new system for long enough, learned behaviors organically became global behaviors. This can apply to any operating model design, regional or otherwise.

Behavior is a two-way street; it is both influenced by operating model design and should be an influencer of operating model design selection. Organizations adopt certain behaviors and behavioral patterns that then become common practice due to the positioning of organizational blocks.

We previously talked in great depth about the linkage between behaviors and operating models in the post, “Structure eats strategy for lunch: Insight into operating model design.” Behavioral considerations are an imperative for ensuring that companies are supported to shift the culture of the organization to meet new age demands, such as digital. Without the right behaviors in place, employees won’t be able to effectively embrace and enable change. Simply put, there is no magic potion. Changing an operating model and expecting people to show up with changed mind-sets and behaviors without planning for it is simply wishful thinking. It is like throwing a Hail Mary pass; someone may catch the football, but then again, it may just as likely be an anticlimactic ending.

Not only are behaviors an output of operating model design, but they are also an input to guide strategic operating model design decision making. The positioning of organizational blocks should be determined by pre-established desired behaviors. The design and execution happens around these desired behaviors. By holding structure, roles, incentives, and all other operational factors constant and just looking at the manipulation of the operating model, we find that operating model design creates four key constructs:

  1. Operating organization’s mission is a driver of how the employees view their mission.
  2. Operating model has a direct impact on the way in which employees communicate.
  3. Operating model design has created a set of universal behaviors within a system.
  4. Operating model design influences employees to deliver and view their jobs/roles in a certain way.

The skipped step

We know operating models can be the most significant determinant of behaviors in organizations. Yet time and time again, well thought-out transformations may fail because companies stop one critical step shy of holistic operating model design. They think through most nuances of the future state, from vision to strategy to structure to business processes to facilitation of change, but fail to consider the types of behaviors the new setup will create, and most notably, if those behaviors will actually enable actions and ways of processing information required to achieve desired outcomes. If simply changing business processes and managing change could be transformative, transformations would never fail.

The true foundation of effective transformations sits with designing operating models to create an infrastructure primed to enable desired behaviors. To link the operating model to the endgame, the desired final product, it is crucial to understand and identify the organizational behaviors needed to make sure the new structure and approach actually works as intended. Perhaps the only thing standing in the way of success is this commonly “skipped step.”

Source: Deloitte Consulting LLP

Considering the skipped step is how you can achieve structural alignment with other organizational elements that drive at congruence. This is done by understanding behavioral outcomes, then working backwards to understand design needs to deliver desired behavioral outcomes.

The transformations of the future should not be one step shy, especially when that one step—from business process redesign to impact on behaviors and culture—may demark the separation between success and failure.

In our final post of this series, we focus on action: how organizations can put their understanding of the role of behaviors into practice. Stay tuned for High-impact operating design in action: Putting behaviors at the forefront.

Tiffany McDowell is an Organization Transformation & Talent principal in Deloitte Consulting LLP’s Human Capital Practice, where she focuses on helping companies improve performance by building organization structures to execute new capabilities through their workforce.

Uzair Qadeer is an Organization Transformation & Talent manager in Deloitte Consulting LLP’s Human Capital Practice, where he specializes in organizational development with deep focus on supporting culture, change management, and talent strategies. Uzair has delivered transformative organizational strategies work both in the United States as well as internationally.

Julia Rudansky is an Organization Transformation & Talent consultant in Deloitte Consulting LLP’s Human Capital Practice and focuses on organizational strategies, talent, change management, and strategic communications.

Leave a Reply