Whilst it is essential for organisations to have a clear idea of their intended impact, their operating model – the internal structures, processes, and culture that keep the organisation ticking – is key to ensuring that impact is delivered effectively. In the same way that intended impact is the starting point when developing a theory of change, it must also drive the review of the operating model using the same cause-and-effect logiwhy operating models are critical to fulfilling organisational objectives.

In our previous post on business planning, we outlined how to articulate strategic vision and define intended impact. Once an organisation has a refined list of strategic priorities and a definition of intended impact, it needs to ensure that its operating model can bring the strategy to fruition. This involves evaluating the current operating model to ensure that it is aligned to the strategic vision, identifying areas for areas for improvement in how each element of the operating model is implemented and refined. All organisations must consider whether the scope of their activities reflects their intended impact; and whether they have the right structure, processes, systems and culture to support their activities.

Reviewing the operating model

A review of the operating model should break the organisation down into its constituent parts in order to provide a better understanding of how they fit together and where there are opportunities for improvement. It is important to recognise that the components of the operating model are interconnected rather than isolated, and each component should aim to support the services or activities the organisation delivers. As intended impact links the strategic vision to operations, it should be the lens for reviewing the operating model. Each component must be defined from the top-down beginning with activities and services, as they ultimately deliver intended impact. Below are some key questions that should be addressed when evaluating each of the component parts.

Key questions when reviewing the operating model

By decomposing and analysing the different parts of the operating model, the organisation will be able to identify areas for increasing its efficiency and, ultimately, improve and scale its impact. Our business planning template provides a tool for distilling this evaluation, summarising the current approach, its strengths and weaknesses, and the desired future approach for each component of the operating model. Not all of these areas can be acted upon – they should be prioritised by the impact they will deliver and their level of feasibility. Once they have been signed off by the relevant governance group(s) as ‘key change initiatives’, an implementation plan, with key deliverables, responsibilities and deadlines, needs to be developed and subsequently managed. In the next part of the series, we will examine how to fund key change initiatives and to ensure that risks are effectively managed and mitigated.

As part of our series on business planning, we have developed a simple template to facilitate the process. Our template is a practical and concise resource that highlights the key areas that should be considered and suggests ways to structure the outputs of the planning process.

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[groups_member group=”Registered”]Business Planning Template[/groups_member]