Operating Model Transformation Is the New Digital Transformation
If you’re driving Digital Transformation in your org, you’re likely thinking about things like improving digital experiences for customers, enhancing data integrations across the organization, and overhauling aging infrastructure in favor of the cloud, serverless architecture, no-code, or whatever the driving trends are in your industry. Yet, as leaders, we need to dive deeper, shifting our focus to operating model transformation – the real game-changer for companies today.
Let’s get real for a moment. While you probably have a clear vision of the 'WHAT' in your transformation journey – perhaps the digital facets and the operating model design – have you paused to consider the 'HOW'? This 'HOW' is more than just the visible aspects; it's about the often-ignored internal shifts that dictate the success of an operating model transformation.
When I talk about the HOW, I’m not talking about roadmaps and investments and APIs and migrations. I’m talking about the critical, nuanced internal shifts that are so often overlooked during transformation despite being key contributing factors to success.
The Lure of Technology vs. Holistic Transformation
“Shiny Objects Will Always Be Shiny”
If you’re a CIO/CTO, I’m willing to bet the farm that you’ve been asked for an AI strategy from your CEO, board, or shareholders in the last 6 weeks. Everyone is talking about it (including Congress), and it’s for sure going to impact all of us eventually. But is it the most important thing for you to be thinking about right now? My point is, it’s easy to be seduced by tech. We all have our own weaknesses for shiny objects, even the most pragmatic amongst us.
But we have to be wary when the tech itself dominates the spotlight while the other important aspects of Transformation – like people, teams, and culture – get overlooked. It’s often assumed that the org will flex and evolve as it always has, except that the Digital Transformation you’re trying to drive right now is bigger and deeper, and requires that you pay as much attention to the organization you’re transforming as you do the tech you’re implementing.
The Secret Sauce of Transformation
My experience tells me that the only way to prevent your teams from stalling out, operating in silos, and feeling overwhelmed by change fatigue is to pay attention to how work gets done in your org, then evolve to a more modern system of team structure, roles, accountability, and empowerment.
What we’re really talking about here is an Operating Model Transformation where the operating model – aka the convergence of strategy, business, people and technology – needs to undergo a radical shift in order for the technology to be successful.
What is Operating Model Transformation?
This convergence of strategy, business, people, and technology is a powerful mix, and the idea behind operating model transformation is to get low-value barriers like stage-gates, approvals and pooled resource management out of the way, and stay focused on the value that the technology is there to provide. This is the essence of a Product-led operating model, where teams are dedicated and focused on delivering a set of outcomes, with clear ownership of an experience, platform, or capability. However, sometimes, the way they're integrated needs a revamp.
Interconnectivity and Organizational Evolution
All of these components are interconnected, so you can’t really pull on one without impacting another. Companies that feel stalled in their Digital Transformation have typically forgotten that even the most cutting-edge technologies need the people in their company to evolve in order to support them.
This is about more than training and upskilling – teams must be structured to ensure that there’s a clear connection between the tech experts, the business drivers, the operations and service lines, and sales and marketing. But in most companies, those teams operate in silos and have no construct where work can happen efficiently and effectively across silos.
New Ways of Working: Decoding the Paradigm
The term "new ways of working" isn’t just a buzz phrase. It embodies the foundational principles and practices determining:
How Teams Form and Thrive: The very essence of how teams come together and their collaborative dynamics.
Ownership & Accountability: What they own and are responsible and accountable for delivering in customer and company value
Strategic Vision: How they articulate their forward-looking plans, past performance, and contributions to broader company strategy
Taking down the silos and walls is just the start. Bringing cross-functional teams of experts to own and drive progress is not how most companies are built, yet it’s what is required to make the most of these investments.
As you read this, you might be thinking: do we even have people that know how to do that stuff? Many companies quickly realize they don’t, which is why I talk about talent strategy so much.
Who you recruit, who you upskill, and how you build new practices and team cultures takes effort and attention. It simply doesn’t happen by accident.
The Crux of Successful Transformation
Failure to evolve your operating model as you evolve your technology is the best way to ensure your Transformation won’t be successful. Deep down, you know that you can’t just go out and buy a new tech product off the shelf, plug it in, and walk away. Widening the lens to ensure you’re transforming on both tracks is essential.
Taking an intentional, proactive approach to the endeavor will save you and your teams a lot of time and resources along the path to lasting change. This is truly the most critical element to achieving a successful and sustained Operating Model Transformation for your organization.