C-Level: The Agile Target Operation Model

A new agile Target Operating Model (TOM), the solution for agility, speed and innovation in the enterprise?

«Ground Control to Major TOM, take your protein pills and put your helmet on...», sings David Bowie in «Space Oddity». This is how the project members feel at the start. With a new, agile TOM, organizational agility is to be developed. In order to then be able to adapt to changing market challenges and immediately take advantage of the opportunities offered by new technological innovations.

There are many ways to a new, agile TOM. In the worst case, a procedural model such as SAFe is misunderstood as an organizational blueprint. In the best case, organizations orient themselves to their core value proposition and thus approach new forms of organization instead of a rocket-like transformation «into Space Oddity». A proven mechanism for this approach is Run-Grow-Transform (RGT).

The procedure after Run-Grow-Transform (RGT)

  1. In workshops, identify the most important skills for «run the business», «grow the business» and «transform the business»
  2. Identify changing business requirements in Run-Grow-Transform
  3. Categorize comparison of current functions with the new requirements What do we need to win each in Run-Grow-Transform in the market? What roles do we have in these functions today? Do these roles need to be adapted? What budget allocations do we have in these functions today?

Run-Grow-Transform is not a categorization into organizational units. Instead, for example, IT infrastructure and operations are required for both «run the business» and «grow the business» as well as for «transform the business». The point is to clarify what is needed for what in order to configure an organizational form that can focus on business requirements. This creates the basis for organizational agility.

Agility and speed

Agility does not automatically increase speed. Speed in decision making has to do with corporate culture. How much speed makes sense for a company is very individual. Ultimately, it depends on how good you are at quickly recognizing and correcting wrong decisions. The better you are at it, the more speed you can afford.

Agility and innovative strength

There is a correlation between agile organizational forms with a fast decision-making culture and their innovative power. If Run-Grow-Transform is applied continuously, the organization is aligned with new business requirements. The innovative power is strengthened by two factors, among others: On the one hand, by the organizational ability to recognize market developments and changes in customer preferences and, on the other hand, by taking advantage of new technological opportunities.

How do you recognize an organization that is agile, fast and full of innovative power?

Informally:

  • Are employees organized in cross-functional teams and have team-based, performance-oriented goals?
  • Are products / services developed iteratively and is customer feedback incorporated in fast cycles?
  • Are there flat hierarchies and fast decision-making cultures?
  • Is there an entrepreneurial spirit in the teams?
  • Does Servant-Leadership work?

Formally:

  • Use e.g. DevOps-Research and Assessment to classify your own organization in comparison to others

So you can better classify your current location on your own journey of agile transformation and don't end up «lost in space» like Major Tom.

Read the full article by our expert and Managing Partner Peter Graef. Published in C-Level magazine 4|2018.

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