Welcome to our Blog series. We hope you will find this insightful as we cover all things Operating Model and Internal Strategy. Whilst RJT focus on high-growth companies, much of what we cover will apply to companies large and small.
1 Line Summary / TL;DR: Understanding your operating model will make your customers, employees and investors happier.
First, we should start by expanding on what we mean so we are all using the same language. I have found one of the biggest mistakes consultants make is too many assumptions and not asking the simple questions. Well, as I can't ask you I'll lay out what Operating Model and Internal Strategy mean to us here at RJT - shout if it means something different to you.
Let's use the example of a children's lemonade stand, as most people understand the analogy even if they have never seen one outside of TV or business articles like this.
So, think about everything a child does in running their lemonade stand - we can break that down into the external elements of Strategy, the 'what:' what markets are they in, what they sell, and what their prices are. They sell lemonade (product), on the street outside their house (market), at $1 a cup (price). This is focused on how they generate revenue.
Then the internal elements strategy can be thought of as, the 'how:' how they make the product, how are they set up, and how they make money. They get the ingredients from their parent's fridge (sourcing), hire their siblings for $1 an hour (workforce) and outsource their accounts to their dad (back office)... these things are mostly about costs.
Now obviously it's not this simple and there are many interrelated elements. But these same principles apply to all companies.
At RJT we focused on the internal side of strategy and the primary method we use to do this is around a company's Operating Model. If you were building a company from scratch this would be the blueprint - now, we have done that once but it is rare. Think about if you had to try and replicate your company, how would you describe all the things that make your company work? The Operating Model framework (see picture below) allows us to break this down in an organised way, and within each hexagon there are sub-elements to get into increasing levels of details, where relevant. This is one reason we love this model - it is flexible to the circumstance and works as well for a £100m company as a $50bn company.
So now we have got that straight, let's talk about why you should care. Well, you already have an Operating Model today. It may just be by happenstance, not choice, but understanding it can increase your profit/return, make your staff happier, make your customer happier, decrease your risk, set you up for the long term and improve responsiveness to leadership to name but a few.
Now, you may be thinking those are some bold claims. We have achieved all these and more on our past projects, so we hope you come back to learn more in our next blog, or if you can't wait get in touch below.
Commenti