Organisation design:  future operating models, seven thoughts

“It’s time to plan the shift from “defense” to “offense,” with the goal to do more with less, reduce operating costs, and create additional capacity to fuel the mission and business in the midst of shrinking budgets, all while creating an engaged and agile workforce.”

This is the opening para of Deloitte’s 2020 briefing Reimagining operating models of the future to thriveIt’s about the post-Covid-19 pandemic world.  The Deloitte approach, further outlined in a blog dated 7 June 2021 offers the value chain and nine principles from which to develop an operating model framework “that moves organisations into the 21st century”.  (Ed: aren’t we well into the 21st century?).  The writer boldly says “the way an organisation ‘creates value’ can help leadership cut through the complexity of politics, legacy architecture and help focus their team members on the main task at hand” i.e. create the future operating model.

I’ve been asked to do a presentation on future operating models.  Googling the phrase brought up this Deloitte report and several other similar ones.  (Apologies to Deloitte for singling them out). I find their sorts of briefings frustrating on a number of counts.  I started to list the frustrations but thought better of it, deciding instead to offer some questions and thoughts on future operating models.

The first thought is: ‘why do we want a future operating model?’ Can we really get from ‘as-is’, to ‘to-be’?   As I’ve said in a previous blog (The future of organisation design) ‘The late South African economist Ludwig Lachmann once wrote: “The future is unknowable, though not unimaginable”.  So, thinking you can come up with a valid future operating model may depend on having a (misplaced?) confidence that you do know what the future holds.   

Listen to an interesting podcast ‘Why we want to predict the future (kind of)’  In it two pyschologists offer a couple of suggestions of why we are interested in such things as future operating models (and Tarot cards):  a) it gives a level of security and confidence, whether or not  b) people would like to sense of what they have to worry about or feel optimistic about. 

The second thought is are we limited in thinking about our future operating model (irrespective of whether we can predict the future) by the way we think about the present?  The same psychologists, in a different podcast, discuss the fact that our relationship to the present has more to do with how we imagine the future than we might think. In this episode ofTwo Guys on Your Head, Dr. Art Markman and Dr. Bob Duke talk about the psychology of futurism. 

As an example, this week’s Big Issue has an article by Simon Frederick talking about ‘The Outsiders?’   He says that ‘the UK television industry and the way it is run needs changing’ which I interpreted as it needs a future operating model.  He picks up on ‘diversity’ saying ‘There isn’t a diversity of content on UK television.  The people who run UK television have not got to grips with how to solve that because they see it as a problem.  It’s not a problem, it’s just a lack of creative thinking’.   Does the way the BBC thinks about diversity now, limit the way they think about it in the future?  If so, it is a significant limitation that opens up the field for channels that think more creatively about diversity.

The third thought is about what is the time horizon of a future operating model?  Is it realistic to think about a time horizon of 5 years?  Or is a future operating model for 12 months out too far?  If you are a social enterprise tech start up, for example, those participating in Careful Industries Emerging Infrastructure Design Lab the time horizon for a future operating model may be quite different from Unilever’s,  (established 1929).

The fourth thought is how much are organisations willing to put the time and effort into thinking about the future? 

Take an example I was using last year (see blog image) about economic recovery from the pandemic.  It shows ‘Reverse radical, swoosh shape, U shape, W shape, and V shape’.  Suppose you were developing your future operating model at the time, which recovery shape would you have based your operating model on?  What methods/info would you use to decide?  Suppose there was no agreement amongst the team developing the operating model?    This type of discussion takes reflective discussion with many stakeholders.  But often future operating model work is outsourced to consultants, and/or too little time is invested in really reflecting on imaginable future contexts. This may limit the value of the operating model produced.

The fifth thought – does the current visualisation of future operating models constrain thinking about them.   In my experience and looking at images of future operating models, a majority of them are linear (again the Deloitte ones exemplify).  Can, for example, a principle of an operating model ‘to encapsulate the complexities of a 21st century firm’, be expressed in a linear model comprising boxes and lines?  (A similar question to the one I ask  in organisation design workshops on whether an organisation chart can encapsulate the network of relationships and interdependencies amongst the people on it).   

This brings in the related question of is there an agreed definition of what an operating model is?  I wrote a blog a few years ago – Operating and other models –  that considers the confusion around the terms and what they encompass.  The words and labels used, like the images, act to shape/channel thinking.  Should we be thinking of a different vocabulary around concepts of operating models, future or current?

The sixth thought –  if you are thinking about future operating models, then a broader question is,  what are you thinking about future organisations?  For example, could you imagine your organisation becoming, or being upstaged by,  a decentralised autonomous organisation (DAO)?  Are you recognising  that the boundaries of your organisation are hard to define i.e. what’s in and what’s out of any future operating model.   For example, how might a future operating model change if people started to think about partners in place of suppliers?

The seventh thought – what is unknowable but imaginable that we risk not factoring in when, with hindsight, we should have?  Assuming an acceptance of the idea that the future is unknowable but not unimaginable, then it is possible to start including all manner of possibilities (perhaps stretching our thinking on ‘inclusion’ in all its forms?).  I have two pictures – one of a street in New York in 1903 which only shows horse drawn vehicles, the other of the same street 10 years later with no horses at all, only engine powered vehicles.  Could the 1903 future operating model designers have imagined that 1913 future? Maybe, or maybe not. A future operating model has to be able to flex to any emerging ‘to-be’, not a specific desired one.

Having had these thoughts, I’m wondering how to form a future operating model presentation. If my experience is anything to go by, the audience may well be expecting a practical ‘how to’ rather than a reflective experience.  So, with the seven thoughts above in mind, what is an alternative to the traditional future operating model  ‘how to’?   Let me know.