Operating Models

[env]

Not quite sure if this is the right place here, but worth a shot.

There seem to be quite a few consultants, change people, PMs and business analysts on PH so I was wondering if any of you work on Operating Models if you use specific tools or software to them or just stick to the dreaded PowerPoint?

I ask as I keep getting these things across my desk and all seem to be in a different format, in PowerPoint and therefore not the easiest thing to track etc

Thanks

[mikees]

Mainly PP for presenting to the client. The 2 that I have been involved with (BCG and McKinsey) use complex xls to model the spans and layers and “correct the pyramid” to reduce org depth (usually 8 layers) and span of control (1 manager to 8 managers though individual contributors (non line mangers) can increase this to 15)

I’ve been thru this a few times............

Any questions ask away

M

Ps the xls can have VBA front ends to make it look more sexy (McKinsey) others not (BCG and some smaller uk based boutique outfits)

[env]

Mike thanks

So thinking that through do they have models for an oil and gas company vs. a bank vs. a retail firm etc...or is it one spreadhseet for all that they configure?

[mikees]

I’ve only seen IT and outsourcing ones

Logic would suggest that they will apply the standard dogma to any vertical but maybe tweak depending on the specifics

[KingKongIV]

Correct. Standard rules apply and are tweaked depending on the sector. Averages out to each manager having 6-8 direct reports and the whole organisation having 8 (ish) layers of management. Industries which have large numbers of unskilled employees performing repetitive tasks (call centres etc) leads to more reports to a single manager.

[sideways sid]

We built a tool for a large client that took a feed from the client's HR system, and crucnched it through Excel to produce spans and layers MI, then compare that to TOM, and run various scenarios to produce appropriate charts for saving profiles etc, flexing key variables.

Astonishingly, the client wanted everything communicated back to the board in Powerpoint slides, so we embedded the outputs and they loved it as they could tweak assumptions in the boardroom, and see the impact on the Powerpoint slide in real time. Despite the hard work designing and building modelling side, I think they were more impressed "that they could do this with Powerpoint"!

[tigerkoi]

Hi guys,

You all seem to be discussing structure and hierarchy charts? Operating Models of companies are much, much more than that. OM = corporate strategy for the most part and isn’t about the specifics of staff, reporting lines, etc. It’s about how the whole place is sorted and works - operates - to maximise value generation.

Simply put: if one CEO says to another in friendly merger chat, “explain your operating model”, he’s not expecting piles of hierarchical charts.

No he’s expecting a “as you know, we sell 158 products, across three core business lines. Geographically we’re spread in x countries and our strategy has long since been to co-locate major production centres with areas of low resource extraction cost. Now, in order to deliver this we’ve got production centres here and research & strategy focus on....”. Abstract.

The hierarchy charts, who reports to who, technology strategy papers that highlight key vendor risk, ongoing contracts, all that jazz....that’s just part of the drilldown and detailed picture when people want to pore over the nuts and bolts. The visual representation of a companies OM may therefore contain dozens, hundreds of these other documents, designs and whatnot. But they feed the OM.

OM is strategy (to deliver). It’s not pumped out by .xls. Hope this helps.

[env]

Tigerkoi - yes it does, thanks. The ones I have come across start with what you are describing and then go down into org charts, and even processes and procedures if say the regulator wants a peek.

Have you come across any software for doing the whole thing in?

Thanks

[tigerkoi]

Hi Env - no worries! My struggle is to give a blithe response when there’s always far more to it, if you see what I mean!

The #1 question though is, who’s the audience? That defines everything.

Are you the audience: a boss of small/medium/large/conglo? Is this a true corp strategy linked exercise?

A newly installed “Global Head of...” with 200-2000 bods who wants a management view of team?

Just been tasked by the leaders of the company to develop and formulate the OM for the firm?

Or just someone within an organisation who’s been asked to gather everything together as a side project?

Is this an OM exercise or a TOM? A TOM means that restructuring is in the thinking...

Sorry, hate sounding onerous but if your ask is what I think it is naturally it leads to loads more questions!

If just a boxtick because of potentially regulator viewing, I’d doubly question you know you have the right approach. Depending on industry, some innocents sent over from an external body are out their depth. Fine. But there are few really schooled and experienced, and if you’re a sector in the news, more scrutinising. Any sense they have what they’re looking at is a brushed up aggregation of business teams, pictures and processes, and not a true thought out OM, intrinsically linked to strategy from top of company down, owned by the CEO, or various SMRs, might lead them to really dig out the firm.

Blithe response though - simply doc aggregating, some tech guy should be able to take all the MS files and link them. The guys above have made great suggestions, and your questions then are on scalability, necessity, etc etc. Large company, taking it seriously, then you may have an Oracle relationship; push them to Hyperion the whole lot. For free - on the account, they’ll hate that - as they like to bill heavy.

95/100 though, when senior execs, after months of bloodletting, group & discuss the op model....the paper expected at hand is usually 20-whatever pages long, first few with spiffy corporate BS and how the model supports the strategy, with max 1 page apiece on each subunit top level hierarchy (leader, band below, not all minions), and things like key systems underpinning operations presented as a schematic that’s been resized to death out of visio by some poor soul...everything cut and paste from the original submissions.

Audience.

Happy to answer further & find out how you get on.