How an organisation arranges people, processes, technology and governance to deliver what its strategy promises. The layer where strategy either becomes real or fails to, without anything visibly breaking.
Many decisions presented as technology or restructuring choices are operating model choices in disguise. Miss that, and the most consequential part of the decision gets made by default.
Last reviewed 3 July 2026 · Free and ungated
Selected senior operators who have run the target model elsewhere can tell you what it demands before you commit budget, resources or reputation.
Pressure-test this decisionAn operating model describes how an organisation actually delivers: who does what, how work flows between functions, which decisions are made where, what technology underpins it, and how performance is governed. Strategy says what the organisation intends; the operating model determines whether it can.
When an ERP is replaced, operations are outsourced or two companies are merged, the headline decision carries a second, larger one: how the organisation will work afterwards. Choose a platform before settling the operating model and the vendor's reference architecture becomes your operating model, not because anyone chose it, but because reversing it later costs more than anyone will approve. The same applies to outsourcing: the contract fixes an operating model for five years, whether or not the organisation designed one deliberately.
Target operating models drawn as organisation charts, which capture reporting lines and miss how work actually moves. Designs that describe a destination with no credible route from the current state, so the organisation lives indefinitely in an unplanned hybrid of old and new. And ambiguity of ownership: when the design leaves two functions each believing the other owns a decision, the gap surfaces as a customer-facing failure months after go-live.