Three reasons why it’s important to get your Target Operating Model right
Over time, customer demands change as new technology and legislation appears, the market changes, and customer expectations increase. As a member of your organisation’s senior leadership team, it’s frustrating when something is holding you back as you try to propel your social purpose organisation forward. Different components of the organisation, such as people, processes, facilities and systems, feel disjointed and are not focused on providing value and the best possible experience for your customers.
In a nutshell, you’re currently stuck with an operating model that may not be fit for purpose. Here are three ways the right Target Operating Model can help:
1. Improve the customer experience
Services naturally become outdated over time as customer needs evolve. Sometimes it’s impossible to move forward without first taking a step back to look at the fundamental set up of your organisation.
Rather than simply reviewing whether you are ‘doing things the right way’, a perquisite to designing a new TOM is assessing the more fundamental question of ‘are you doing the right things.’ Re-centering your organisation around your vision, purpose, your customers, and the value you can add ensures you can structure and set up your organisation and services to deliver what is truly important, and therefore deliver a critical element of providing an excellent customer experience.
“I thought this was a very interesting piece of work. It made us step back and review what we were doing, even if we thought what we were already doing was good, this challenged us and made us think.”
(Ian Thomson, Executive Director at Johnnie Johnson Housing Trust)
2. Increase efficiency and staff satisfaction
By uniting your organisation with a single clear vision and set of goals, and designing the operational set up around delivering these goals, your teams will be well placed to provide the best service for your customers and do so in the most effortless and simple way. A good TOM will take clear priorities set at the most senior level and intertwine them into the operational set up, meaning your frontline staff are in the best position for service delivery success.
3. Enable a more focused (and therefore effective) transformation
The right Target Operating Model makes it clearer which transformation activities you should focus on to achieve your future state, while also creating an environment that is better equipped for further improvement. The result is more effective transformation programmes and a greater opportunity to embed continuous improvement. Assessing your organisation at a high level is an effective way to spot areas of waste to eliminate and identify where to introduce new customer-focused initiatives. Working towards a clear shared vision helps to ensure that time is only spent on value-added work.
Warning signs that your TOM may not be fit for purpose
The absence or poor development of a TOM often leads to:
Changes being uncoordinated and possibly conflicting against each other
Operations being determined by the technology your organisation has invested in and often leading to things getting worse operationally
Restructures not being aligned to the demands on your organisation or delivering value to customers
Investment into areas that will not help your organisation move forward.
Overall, a good Target Operating Model is critical for large-scale, organisation-wide improvement and ensuring that these changes are effective. If you need help with designing and implementing an effective TOM, email hello@ad-esse.com.
