[MUSIC]
An operating model is a visual representation of how an organisation works
to deliver value to its customers or beneficiaries.
One way to do this is by using the Operating Model Canvas.
The Operating Model Canvas was developed by Andrew Campbell and others
as a visual tool for converting strategy into operational choices.
The tool can be used at a high level
to map the entire organisation or at a low level
to map a function within the organisation.
It consists of six elements. These are represented by the acronym
P-O-L-I-S-M
or pol-ism
At the heart of the canvas is Processes.
This is the most important element,
as it outlines the work needed to deliver the value proposition of the organisation
to its customers.
It can be very helpful to integrate Michael Porter’s concept of the value chain here,
in order to show both the primary activities
that directly contribute to competitive advantage of the organisation
and the 'support' activities that are required.
Organisation captures information about the people who will be doing the work
that's outlined under processes.
We can use this to detail reporting structures,
working relationships and decision-making authorities.
Location is used to capture where the people in the organisation are based,
and where the work outlined under processes is going to be done.
Depending on the level that we are mapping,
location can represent the countries or regions where work happens
or it can map the locations within a facility
where activities take place.
It can be helpful to split this box in order to consider both
where the organisation sites are located
and where the output delivery occurs.
Information outlines software applications that are needed to support the processes identified.
It can be used to identify key systems that underpin specific processes,
bespoke information systems
and more general sources of information that will help people in completing work activities.
This box can also be used
to identify business owners of important applications and data sources.
Suppliers allows you to capture information about
third parties that are needed to support the process steps.
It can be helpful to start populating this box
by identifying important inputs
that are needed for processes to be completed,
before identifying any key sources of supply
that would require us to maintain special relationships.
Management System
is where we capture information on the planning process required to keep the operation functioning,
the budgeting processes that ensures good financial controls are in place,
the performance management system used to manage the process,
and any continuous improvement processes
The Operating Model Canvas can be used as a standalone document,
that provides a simple overview of how the organisation functions,
or it can be extended using additional tools and frameworks
to provide a comprehensive and detailed view of the organisation.
Typically, you would work on creating the Operating Model Canvas
by bringing together managers or people from each function
within the organisation and asking them to share their thoughts and ideas
about the organisation,
using the six elements of the canvas to focus the discussion.
By collaborating with others,
we are able to produce a well-rounded view of how the organisation operates.
There are a number of benefits to having an Operating Model Canvas:
By having a shared view of how the organisation operates,
it becomes easier to communicate it to a wide audience, such as employees,
which provides a sense of shared purpose.
This is even more effective when combined with a vision statement
about the future of the organisation.
The operating model is focused on core activities and capabilities
and identifying the systems, processes and structure to deliver the value in line with strategy.
It can be more meaningful to people
than a more abstract statement of strategic intent.
Not only does the Operating Model Canvas allow us to present a concise view of our organisation to others,
it also allows us to explore and assess potential
innovation or changes to our approach.
Perhaps the biggest benefit of working on the Operating Model Canvas .
is the greater level of shared understanding and alignment
between those who collaborate to create it,
which arises from the discussions that take place.
[MUSIC]