COO obsessions: The Target Operating Model

TOM: Target. Operating. Model.

Three letters or three words, whichever way you look at it they might as well spell OCD for the COO. Whenever there is a change directive from on high the beleaguered COO thumbs through the manual of requisites and happens on the well worn page with the entry for Target Operating Model, that final stage and ultimate goal that describes where this change will lead you, the ‘to-be’ state where all your Processes, Data, Technology, People and everything else will be beautifully printed in glory.

Wrong.

A Target Operating Model is in fact a fallacy because by the time you think you’ve got there, the world has changed again and in some cases so drastically that it’s now rendered obsolete. In some businesses the term has become a dirty word and the very utter of the phrase has them reaching for the crucifix and wooden stake, I’m coming across this more and more now. The ‘T’ in TOM is slowly morphing into something akin to Transient , Transitional or Transparent rather than Target simply because it represents the organisation at a point in time but is ready and flexible enough to change when conditions demand it and it’s known to all.

More often than not when the COO engages consultancy to come up with the prized goods they’re delivered glossy powerpoint slides of aligned rectangles and process catalogues (or in KPMG’s case, a spreadsheet) but the actual mechanism and advice of actually getting there is sadly lacking because what’s not divulged is just how to implement it, by which time you’ve already burned through the budget for that hallowed slide deck. I’ve seen this a few times. Who signed off that purchase order ?! You did remember….thanks, now I have a £1m powerpoint deck to paper my room with.

Funnily enough, those steps that are missing represent the transitional stages the business must go through and adopt. Note, the business must go through these stages, the business must be involved at every stage. Transition is not done to a business, the business is lead through transition.

Making change on that scale takes time, making change on that scale is a cultural shift, making change on that scale is a budget killer. So don’t make it on that scale.

Oh sure, having a target to aim for helps direct the programme of work. Consultancies love this because they can pull out a ready made slide from the back pocket based on ‘best practice’. Who’s best practice ? Yours ? Nope. It’s the same best practice your competitor bought. It’s the same best practice that failed when the economy did because it was so good it couldn’t react to the radical shift. Forget best practice (it didn’t work for ERP, in fact it killed it) best practice leads to complacency.

An operating model should be loosely coupled and dynamic enough to change on demand not a stack of silos that’ll collapse when the economy does. If we look at the practice of BPM we talk about it being a constant in business, an integral part of the fabric of the organisation, continually adapting and improving processes in response to customer, environmental, economic and a myriad other changes. So why paint yourself into a corner with a rigid operating model that internal change has to conform within ?

If you’re a COO, don’t paint a target on your back for the darts to hit as you walk past the Boardroom.

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