So, you’ve decided to evolve your operating model, what’s next?

Once you decide to modernize your operating model, the next step is to configure and build capabilities in a way that is right for the organization. A common pitfall is trying to be good at everything, which adds complexity, requires additional resources, and reduces focus. But how do you make operating model design decisions consistently in a way that is aligned to your strategy and business model?

We’ve found that leading organizations use archetypes to make strategically sound, value-creating design decisions. Those decisions include:

• What the overarching business model will be.
• How to enable customer, employee, and external ecosystem partner journeys.
• Which services will be delivered and how.
• What the key roles and optimal organization structure will be.
• What the redesigned processes will look like.
• How to simplify and modernize the technology architecture.
  

What are the five operating model archetypes?

Deloitte has identified five archetypes that will guide operating model decisions. Let’s explore them one by one.

Customer-First organizations inform their decisions with a clear understanding of customer needs and preferences, all of which are sourced from—and proliferate throughout—the organization and embedded into the operating model design. They offer new combinations of boundary-spanning products, services, and information to meet specific needs and requirements. Customers receive differentiated experiences with highly personalized, omnichannel products and services. Examples of differentiating capabilities for Customer-First organizations include:

• Customer account management
• Marketing and consumer insights
• Matured agile delivery

Under this archetype, the focus is on differentiated products and services, including delivery method. Organizations strive to connect their product or service to other customers and products in ways customers can’t do for themselves. Autonomous business units drive product development, with product teams often located closer to customers so they can deliver newer products faster than the competition and charge a premium based on that capability and/or product brand. Examples of differentiating capabilities for Best-Product organizations include:

• New product development
• Brand management
• Research and development

Organizations with a maximum efficiency archetype focus on getting from input to output as quickly and cost-effectively as possible so that customers receive the most economical option—often leveraging economies of scale. They cultivate operational discipline to develop a single, integrated management system with ideal flow. Advanced technologies help streamline and automate key internal processes. Examples of differentiating capabilities for Maximum-Efficiency organizations include:

• Service operations
• Analytics and reporting
• Sales and operations planning

With this archetype, organizations view themselves as fundamentally different from industry or sector peers (e.g., “we’re a data organization that happens to sell insurance”). They challenge established industry paradigms with radical new concepts and approaches, enabled by agile capabilities, transformative technologies, and an entrepreneurial culture that embraces change. A defining trait is flexible decision-making and capabilities to drive continuous innovation. Examples of differentiating capabilities for Industry-Disruptor organizations include:

• Data and analytics
• Technology delivery
• Talent development

Organizations that follow a high-reliability archetype have a strong focus on exceptional consistency to persistently accomplish goals, avoid potentially catastrophic errors, and deliver consistently safe and high-quality service. They maintain high attention to identify anomalies, with an acute focus on resiliency to contain errors, while adapting to maintain operations. This archetype will not be relevant to all industries and organizations. An example where this archetype is applicable is in health care (explore the path to high reliability in health care). Examples of differentiating capabilities for High Reliability organizations include:

• Quality management
• Operational resiliency
• Process management/improvement

Which archetype(s) are right for me?

An operating model archetype doesn’t have to be a singular choice. Usually, organizations have a dominant archetype plus one or two secondary archetypes. But anchoring on a dominant archetype in your operating model transformation is important because it guides often tough design decisions, particularly as they relate to aspirational customer, employee, and external ecosystem partner journeys. Secondary archetype(s) are important because when combined with the dominant archetype, they often help create the competitive differentiation that our clients seek.

While each of the five archetypes has proven successful in the market, the one that’s right for your organization is the one that best meets your business strategy and ambition, customer and stakeholder needs, and corporate social responsibility.

Executing on your chosen archetype(s)

After you select the operating model archetype, what’s your next move? In our next blog, we’ll talk about how archetypes impact customer, employee, and external partner journeys, and how those journeys translate into decisions on which capabilities to prioritize and build.

Get in touch

	Joe Alt Principal Operating Model Transformation Leader		Rob Kaye Principal Operating Model Transformation Leader
	Brendan Houng-Lee Senior Manager Operating Model Transformation Leader