What I mean by an operating model

An operating model is how an organisation turns a customer need into a product or service, delivered at the right time, in the right quality and at the right cost.

In commercial and medical operations, that customer can be a doctor, a patient, a payer or a market team receiving a service from a global function.

The work behind it runs end to end, across functions, from the need to the deliverable. So I start with the process, not with the org chart. Structure follows process, and process follows strategy.

Three choices create most of the value

What makes those choices hold

• Roles and accountabilities, so every step and every handoff has an owner.
• Systems and data that carry the work and show where it stands.
• Governance across functions: who decides what, globally and in the markets, and how conflicts get resolved.
• Funding: who pays for what, and who keeps the savings.
• Incentives and measures: what budgets, targets and scorecards reward, because incentives drive behaviour and behaviour drives decisions.

At Boehringer Ingelheim, the global services platform ran at around 50% lower structural cost than the less centralised model it replaced. The savings came from all three choices: one global contract with a service catalogue priced per deliverable, work moved into hubs and offshore, and harmonised processes.

Every engagement works on this model. Strategic Clarity helps you take one of these choices before it is hard to reverse. Scalable Operating Models designs the model as a whole. Profitable Growth keeps its cost in line as the business grows.