New operating models for strategy, sales and marketing are being developed to deliver seamless customer experiences. As businesses develop more sophisticated customer experiences to meet increasing demands and expectations of customers the organisational and operational models are changing.
To overcome the challenges of functional silos and encourage cross-functional and inter-disciplinary team-work companies are replacing traditional strategy, marketing, sales, support and services with unified organisational and operational models. The have suspended belief in sales and marketing functions by appointing Chief Commercial Officers, Chief Growth Officers, Chief Customer Officers. They are prioritising 'things to be done' over structure and organising themselves around customer needs, experience and process.
The underlying intent is to align the business with customer experience and expectations and eliminate friction within the business. These new operating models have to be more dynamic and adaptive and at the same time robust and resilient. For most businesses these competing priorities present transitional and ongoing operational challenges that can only be overcome by re-thinking 'front-end' operations.
5 characteristics of modern operating models.
1: Focus on value and outcomes
All operating models need to be aligned to business outcomes but too many are only aligned to business strategy and relatively short term business outcomes. Focus on competitors leads to competitive advantage but focus on customers leads to value and focus on future customer leads to differential value. New operating models place particular emphasis on customer and market outcomes like economic and emotional value delivered to customers and differential advantage 'in-market'. They go further to balance short and long term commercial outcomes to include revenue, cash flow, margin, intangible asset and intellectual capital growth.
2: Focus on disciplines
Focus on disciplines, that is 'things to be done', the strategic capabilities, customer and commercial outcomes. There are at least 38 disciplines that are currently delivered by strategy, marketing, sales and support functions but many businesses remain unclear about these disciplines and the new processes, behaviours, organisations and operating models that are required support them. Without this clarity businesses will struggle to re-engineer their operations and transition to new operating models. Adaptomy have developed a systematic framework for capability development and operating model design across 38 customer and market facing disciplines called Unified Commercial Engine DNA.
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3: Cross-functional, multi-disciplinary teams
The right combinations of skills and experience is important in any operating model. But, more specifically it's the right inclination, attitude and behaviours aligned to specific disciplines that make all the difference. Traditional role modelling using techniques like RACI are being augmented, even replaced by sophisticated psychometric profiling for individual and teams. The intent is to create high performance, cross-functional and multi-disciplinary teams connected through shared purpose and outcomes and a range of integrated collaboration tools.
4: Adaptability and resilience
Customer, market, economic and social situations change rapidly, sometimes unexpectedly and modern operating models need to be designed with this in mind. Leading practitioners are building 'core adaptability and resilience' into operating models at a granular level. This begins with modular definition of the disciplines and processes that need to be supported before considering how the stack of enabling information and technology can be organised. This allows time to fully consider adaptability of business behaviours and prioritisation of strategic capability that will drive better customer experiences and differential advantage 'in-market'.
Increasingly, technology is becoming a core enabler in any operating model and emerging technologies like Artificial Intelligence (AI) and machine learning are set to transform how modern operating models work. However, there are integration and adoption challenges in introducing new technology alongside legacy technologies. Any new operating model needs to consider the extent of transformation from 'legacy to new' and how it will happen. That means managing behavioural and structural challenges as well as information and technology ones.
5. New management systems
New management systems for a post-digital age are likely to be driven by shared purpose, operating principles, knowledge sharing and common collective value driven behaviours. Consequently, leading companies are quickly moving toward different performance systems, new incentive models that recognise capability, productivity and value contribution. They are also developing more interactive networks, to accelerate and socialise real-time communication and feedback between front-end operations.
What's required to make you different?
Systematic ways to build sources of differential advantage that help you 'win in market'.