The Accidental CIO

4The Anatomy of an Operating Model

People work in the system that management created.

The role of management is to change the system rather than badgering individuals to do better.

A bad system will beat a good person every time.

—Dr. W. Edwards Deming

To change performance, we need to change system design. To do that requires a change in our thinking, change in our assumptions and beliefs.

—Hermanni Hyytiala

If the strategy is what we will do, the operating model describes how we will organize to do it. The operating model defines “how we work around here.” In its simplest terms, the operating model describes the choices on how people, process, and technology will be used to deliver the strategic business outcomes. The operating model communicates where accountability lies; how decisions are made; the ways of working; and how we will invest, govern, and measure performance. The operating model is our system's structure, the purpose of which is to deliver business benefits by producing customer value. Changes made at the operating model level will have an influence on the patterns of behavior within IT, leading to the improved delivery of positive business outcomes. As illustrated in Figure 4.1, the operating model is the link between a company's strategy and the IT organization's ability to execute it. An effective operating model will ensure the successful execution of strategy. In Part 3, “Strategy to Execution,” we will look in detail at how strategy shapes the ...