Jesper's Lecture on Business Transformation and Operating Models

Introduction

• Most transformation projects fail; average failure rate is 75% (McKinsey, Bain, BCG).
• Common failure: inability to define new ways of working/operating.
• Digital transformation often only updates technology but not business processes.
• Digitizing suboptimal operations can worsen inefficiencies.

Key Concepts

Strategy

• Definition: Outlines an organization's ambitions and its competitive markets.
• Purpose: Sets what and where an organization wants to achieve.

Business Model

• Definition: Describes how an organization generates value/money.
• Components: Identifies customers and value propositions.
• Note: Multiple business models for multiple markets.

Operating Model

• Definition: Describes how a business operates and delivers value.
• Components: Defines structure, roles, capabilities, and processes to meet future requirements.
• Example: Amazon's AWS vs. Amazon marketplace.

Defining Operating Models

Common Approach: People, Process, Technology

• People: Includes organizational structure, culture, and capacity.
• Process: Includes value streams, capabilities, governance, space, and facilities.
• Technology: Includes operational, management, and reporting systems.

Models and Frameworks

Deloitte Industrial Transformation Framework

• Approach: Linear process from strategy to operating model.
• Limitation: Lacks detail for transformation decisions.

Operating Model Canvas by Andrew Campbell

• Approach: Granular, assumes existing strategy and business model, focuses on 6 areas.
• Components:
  • Value Streams: Steps to create and deliver value.
  • Supplies: Inputs into the value stream (internal/external).
  • Locations: Work performance locations (country/office specifics).
  • Organizational Structure: Roles and relationships.
  • Operational Systems: Technology applications.
  • Management Systems: Metrics and KPIs.
• Additional Resources: Templates available online.

Case Study: Mental Health Association (MHA)

• Context: Not-for-profit with 50,000 members facing strain from Covid.
• Challenge: Transform application to onboarding process.
• Current vs. Target States:
  • Applications: From manual processes (emails, faxes) to online forms.
  • Confirmation: From manual checks to automated validation.
  • Assessment: From manual qualification checks to API-driven automation.
  • Communication: From manual emails/calls to automated emails.
  • Onboarding: From labor-intensive process to automated emails with minimal calls.
• Outcome: Future state with 2 part-time employees; redeploy remaining.

Operating Model Canvas for MHA

• Inputs: Regulator's national education database.
• Locations: Head office, remote working.
• Organizational Structure: Part-time assessment manager and officers.
• Operational Systems: Salesforce Sales Cloud, Marketing Cloud, Power BI.
• Management Systems: Weekly/quarterly assessment reviews.
• Benefits: Clarified important processes, aided communication for transformation.

Next Steps

• Develop business and capability models.
• Link capabilities to value streams and stages.
• Insight into full organizational impact and future operations.
• Resource: Previous video on IT capability model.

Conclusion

• Call to Action: Share questions, feedback, insights in comments.
• Engagement: Like, subscribe, and watch next video.