5. When There Is No Clear Operating Model
According to McKinsey's 2025 article A New Operating Model for a New World, even high-performing companies experience an average 30% gap between the full potential of their strategy and the results they actually achieve. One of the main reasons, according to the research, is shortcomings in the operating model.
In other words, an organization may be fully capable of achieving its ambitions, yet still fall short because its day-to-day operations do not adequately support strategy execution.
The right operating model can significantly amplify organizational performance and enable results that create a competitive advantage in the market. That is exactly what this article is about.
Another important finding from the research is that organizational structure alone does not create value. I discussed this topic in detail in an earlier article in this series.
In the previous parts, we explored how strategy can go off track right from the starting line:
🎯 When there is no shared vision and direction.
🎶 When the leadership team lacks real alignment.
⚡ When everything becomes a priority.
🧱 When we expect the organizational structure to solve our problems.
What Is an Operating Model?
An operating model is the system through which an organization creates and delivers value to its customers.
The business model describes what value we offer. The operating model describes how we make that value happen in practice.
It covers questions such as:
- How do we work together?
- How are decisions made?
- Who is accountable for what?
- How do we manage priorities?
- What information do we rely on?
- How do we coordinate work?
- What do we reward?
- What behaviors do we reinforce?
In my view, a strong operating model consists of several interconnected building blocks:
A Common Hidden Problem: We Think We Agree, But We Are Talking About Different Things
This challenge appears frequently when discussing operating models.
Leaders and their teams often feel they understand the strategy and agree with it, while in reality they are working from different assumptions.
I see this regularly in discussions about organizational effectiveness. Once teams are confronted with real situations and decisions, it often becomes clear that people have different interpretations of how the organization is supposed to operate.
The shared operating logic is missing.
What Happens When This Is Not Clear?
The symptoms are usually very similar:
- More and more meetings.
- Slower decisions, sometimes even contradictory ones.
- Parallel discussions and coordination efforts.
- Overloaded leaders.
- Increasing coordination requirements.
- Constant priority conflicts.
- Reduced focus.
The organization gradually spends more energy managing itself.
Eventually, many leaders spend more time keeping the system running than focusing on strategic issues.
How Can You Tell If This Might Be Your Problem?
Consider the following questions:
- Do the same topics repeatedly return to leadership meetings?
- Is there a lot of decision preparation but very little actual decision-making?
- Is it unclear who owns what?
- Do leaders and teams complain about excessive alignment meetings?
- Do priorities constantly shift?
- Do different people interpret the same rules differently?
If your answer is yes to several or some of these questions, it may be worth taking a closer look at your operating model.
Where Should You Start?
A useful starting point is to clarify what you want your future way of working to look like and then examine:
- Where does collaboration already work well?
- Where are decisions made quickly and effectively?
- Which teams work particularly well together?
In 4 words: What can you build on?
One of the strengths of the solution-focused approach is that it does not spend a lot of time analyzing problems. Instead, it focuses on the desired future and identifies existing patterns an resources that already support strategy execution.
These often provide the best foundation for improvement.
You Don't Need to Change Everything at Once
Operating models rarely emerge from one large transformation project.
More often, they evolve through continuous improvement.
It is usually best to start with one critical operating challenge.
A strong operating model consists of multiple interconnected elements, as illustrated in the framework above. Together, these elements form a system that enables consistent strategy execution.
When leaders examine how their organization currently operates across these dimensions, they gain a clearer understanding of their organization's unique operating model and can assess how well it supports their strategic objectives.
A Question to Reflect On
If you asked each member of your leadership team separately today:
- Who can make decisions about X, Y, or Z?
- What is a true priority?
- What are the non-negotiables?
- When should others be involved?
- Which forum is responsible for making a particular decision?
How similar would their answers be?
The answer may tell you more about your operating model than any organizational chart ever could.