Why do we need a target operating model (TOM)?

We are frequently asked the question by customers – ‘why do we need a TOM’ as we start to shape transformational change?  

What is a Target Operating Model anyway? 

A TOM captures the future vision for how an organisation (or part of an organisation) will operate in the future – all on one page. When we talk about a TOM we mean all the layers including organisational design, people and skills, data, technology, processes and governance – and how they all fit together. Without this, elements will develop in a disjointed way leading to inefficiency and future rework, and reduced probability of achieving the organisational targets – it’s like building the walls of a house without having an architecture diagram showing where the wiring and plumbing will go.   

What’s a Target Operating model useful for? 

It’s about communication – with complex information becoming easy to understand in a single image, reaching a consensus and avoiding mismatches in interpretation between stakeholders. When asked, leaders often say they’re all clear on the vision and yet we find that each one would draw a somewhat different picture if asked to show how the future organisation would work – or in fact would not be able to articulate the vision in this form at all.  Those key stakeholders who need to will approve the TOM, and the others can be shown it as the target state to align behind. 

It’s therefore about decreasing ambiguity and an opportunity to get those ‘grey areas’ and things that are unknown or likely to change out on the table and agreeing on the working assumptions.

It’s about building alignment – it provides the ‘front of the jigsaw puzzle box’ for all leaders to work towards collectively – being clear about the part they need to play in the future jigsaw puzzle. It forms the basis for developing an efficient and logical roadmap for getting there – with a series of agreed interim states. 

The TOM also supports the leadership of the business today with understanding priorities and focus areas and builds the business for the future successful delivery of the strategic goals.  

What are the benefits of having a Target Operating Model? 

Every team contributing to the final picture will be able to drive towards the final vision state with greater clarity and efficiency if there is an agreed TOM. For example, it helps HR to recruit the right skills at the right time to the agreed framework Org structure – or release the right ones. It helps IT to know who else needs to be involved for the associated people, data and process changes as they implement systems, and it enables leadership to build new capabilities into the DNA of an organisation such as cyber-security. The list goes on.  

Do you need change expertise? 

At Project One, we have helped many of our customers to define and deliver their Target Operating Model, so if you’d like to learn more, or would just like a sounding board, please get in touch. 

Unlock the full potential of your business with our expert insights. Contact us today to discover how we can help you achieve your goals.

theteam@projectone.com