By Mats Ouborg & Bas van Gils
Many organizations think of strategies in terms of “what should be achieved”. They often forget to communicate “how that will look like in the end”. Creating a shared and common understanding of the vision you have is a difficult thing to achieve. Strategy Alliance has created an approach to achieve this with high success rate.
In this blog we dive into the second phase of our REALIZE approach: Business Blueprint & Operating Model. In this phase the focus shifts into describing the high-level solution. We try to understand which capabilities are standardized/integrated, and sketch the overall blueprint for the organization. This tends to be a stable, high-level diagram and set of principles.
As the title of this REALIZE phase might suggest, it consist of two major approaches:
- The operating model, which describes how a company wants to thrive and grow.
- The business blueprint, which is the artefact that communicates the outcome of the operating model.
We explain them both in greater detail.
The operating model
An operating model describes how a company wants to thrive and grow; it is a choice about what strategies are going to be supported. Typically this concerns questions such as process standardization and integration. Different answers to these questions lead to different archetypes for organization, each archetype having specific advantages and challenges. The analysis seems simple, yet in practice this is not the case. Ask yourself the question: across units / business lines / countries, do we really think our processes are / should be standardized? What about integration through shared data?
A choice of operating model leads to a choice for a foundation for execution, which is the IT infrastructure and (digitized) processes that automate the organization’s core capabilities (Ross, Weill & Robertson, 2006). Research shows that very few companies deliberately chose an operating model and build their foundation for execution (the “operational backbone”) accordingly. Typical consequences are inefficiencies, loss of productivity, up-hill battles about implementing enterprise systems, reduced agility and, as a consequence, reduced customer satisfaction.
The choice for an operating model and its associated foundation for execution tends to be stable, often more so than the business strategies that they support. More importantly, when communicated well, they provide clear guidance for the transformation effort in terms of priorities, architecture, and interdependencies.
The business blueprint
The business blueprint is the artefact that communicates the outcome of the operating model / foundation for execution decision. Business blueprints tend to be:
b) avoid implementation details
c) in business terms
Many different types of business blueprints exist. Some are more formal and others less so (e.g. relying on standard diagramming software, or even cartoons). We believe that both approaches can be valuable. Even more, the combination of a formal model supported by easy to digest visuals works well in our view. Last but not least, it should be noted that a version of Occam’s razor applies here: make the business blueprint as simple as possible, but not simpler.
Chosing an operating model and building a business blueprint
In the previous phases of REALIZE, we have established what you want to achieve. The question then is: how will that look like in the end? In the Business Blueprint & Operating Model phase of REALIZE, the choice of the operational model is key as are the supporting principles. We then visualize these operating models using a business blueprint. This helps to simplify communication and generates a shared and common view of the situation.
In the end this helps your organization create a shared view of how your strategy implementation looks like. This will enhance knowledge sharing in the future, but also creates consensus for the solution that will be created. It all is realized by a human centric approach that enables your stakeholders in creative co-creation.