The Search for Clarity
Welcome to The Search for Clarity, a podcast focused on empowering clarity in leadership and execution. Hosted by Richard de Kock, a seasoned Cloud Strategy & Operations Executive Advisor and an Executive & Leadership Coach at www.coachingwithrichard.co.uk. This podcast is a treasure trove of insights for professionals navigating the complex world of business transformation and leadership. Each episode, we sit down with leading industry thought leaders, individuals who have made significant contributions in their fields, to dissect and understand the intricacies of successful transformation. Our conversations aim to cut through the noise, offering clear, actionable insights for senior transformation leaders, consultants, managers, and any professional eager to make a tangible impact in their domain. Whether you're looking to refine your strategy, enhance your leadership skills, or simply gain a deeper understanding of transformation dynamics, "The Search for Clarity" (www.searchforclarity.com) is your go-to resource for guidance and inspiration from the best minds in the industry.
The Search for Clarity
Strategic Clarity for Leadership: Exploring Operating Models with Andrew Campbell (Part 2)
Unlock the secrets to transforming your organization's operating model with insights from Andrew Campbell, co-author of "Operating Model Canvas." Discover how to recognize when it's time for an overhaul, from profitability issues to customer dissatisfaction, and learn how to use the operating model canvas as a powerful diagnostic tool. Campbell guides us through the process of distinguishing between strategic problems and operating model flaws, sharing practical examples and case stories that illustrate these concepts in action.
Join us as we explore the challenges and rewards of designing agile operating models, especially when launching new services. Campbell emphasizes the importance of starting with a clear business model and offers invaluable advice on balancing remote and in-office work, real-time collaboration with engineers, and effective task delegation. We'll also discuss how to maintain adaptability in complex environments and develop strategies to manage volatility and uncertainty. This episode promises to equip you with actionable strategies for enhancing your organization's operating model and achieving strategic clarity.
Engage with Richard further: https://linktr.ee/richardekock
Welcome everyone to the Search for Clarity. We are in episode two with Andrew Campbell, author of Operating Model Canvas, and we are exploring the operating models for strategic clarity for leaders. If you haven't caught episode one, you can check it out on the YouTube or the podcast channels that we have for the Search for Clarity. I've got Andrew, who is an ex-McKinsey consultant lecturer. He was a lecturer at London Business School. He was the director of Astridge and is now at Hult International Business School and has his MBA from Harvard Business School as well and then authored the operating model canvas with Mikel Gutierrez and Mark Lancelot as well.
Speaker 1:So last week we talked about what's this thing called an operating model. I tried to overcomplicate it, bringing all sorts of different complicated scenarios in, and Andrew gave me a good wrapping on the knuckles and no, no, no, we have to keep it simple. It's not supposed to be this big convoluted thing. It's really about helping us execute more effectively and structure effectively to deliver against our strategy. So I've learned something and hopefully everyone else has. So today we're going to be focusing a little bit more on the practical stuff, and thank you so much for joining us again, andrew Greatly appreciate it. So last thing, before we start, just remember that the views and the opinions expressed in this podcast are solely those of the individual contributors, and this podcast is my own independent effort. It is in no way associated or endorsed with any of my employees or clients. So, andrew, what are the indicators that leaders may need to revamp or redesign their operating models?
Speaker 2:running models.
Speaker 2:Well, the most obvious one is that the organization is not delivering what the leaders wanted to do, so it's not making a profit, or its customers are unhappy, or things are late, or those obvious signals that we're not achieving what we want to achieve. There's always a good time to say, okay, why are we not achieving what we want to achieve? Is there something wrong with the way we're set up and can we do some diagnosis? The operating model canvas is a pretty helpful high-level look-see. Canvas is a pretty helpful high-level look-see. Is each area of the canvas working as we think it should be and if not, is that the cause of what's wrong? So that would be the most obvious place to start. If it's not broke, don't fix it, so beware telling the tree up to look at the roots, kind of thing. But, however, other signals that you might want to look at the operating model. Clearly, if you've changed strategy and you haven't changed much we were talking in the last episode, I think, about changing to cloud-based operating model, but keeping most people the same Probably a good time to have a look, see if that really is appropriate. So if you find that people in the organization are complaining about each other or are complaining to you as a leader that things are difficult. That's a good time to look at.
Speaker 2:The operating model had a lovely phrase about. You know most organizations are like Delhi in midsummer Getting up in the morning and getting to work is a real struggle, and getting anything done during the day is a struggle. You know what you want them to be. Is like, as he was teaching at INSEAD I think at the time the woods in Fontainebleau near INSEAD in spring. You know where your life is full of excitement and there's a spring in your step. So if you feel from your organization that they're struggling, even though performance isn't, you would want to change. And that would be true with suppliers too. If your suppliers were saying, hey, this is really tough working with you guys, you would send a good signal that you might want to consider the operating model.
Speaker 2:Feedback from customers that may not be critical to your strategy but is something that's important to them might make you say it's really the data. Are we achieving what we want to achieve? And that is the people. Are the people finding this organization good news? And that's both inside and outside, and if either of those are sending you signals, it's a good time to look at either strategy or operating model, because sometimes the problem is the strategy is wrong and therefore the organization may be well set up for the appropriate strategy, but you've actually got the wrong strategy. Something is coming with some new ideas and it just doesn't fit the situation and you need to change the strategy and keep the operating model safe. So these are two sides of a coin, and one should be looking out for the signals that needs to be done on.
Speaker 1:That's very helpful, I suppose, from what I'm learning and from what I'm hearing from you. If you are finding that you've got particular challenges, say with the culture of the organization, it's a great diagnostic tool, similar to the McKinsey S framework, to go and try and evaluate as a diagnostic and then find the correct intervention as to why we might have certain challenges in certain parts of the operating model, to see if there's correlations between is it the processes that are causing the challenges from a cultural perspective or vice versa, et cetera.
Speaker 2:Um, it seems to be really great it's having about the meaning of these things. We could call it the operating checklist yeah, you mentioned that correct. Yes, it's, it's it's no, it's no more than that.
Speaker 1:So things you need to think about yeah, and you do have a checklist that has been really nicely laid out in the publication. It's a. It's a really great. If you haven't read it, you, you really you need to buy the book. It's a really great um illustration of all of these things. So it's got a checklist built into it, you know, to help you walk through. You know assessing the operating model. So there it is. There's the checklist and it's got many different case stories from different organizations to show you how they've gone through the process themselves. And so, yeah, absolutely right. Thank you for raising that up again. Good tool and a diagnostic In your experience, andrew.
Speaker 1:So I'm a leader, I've got a team, I'm trying to get to specific outcomes. How's this journey look like? Do I just go and get the canvas, draw it out on a whiteboard and start fleshing it out? What's this all practically look like when a leader decides right, I might need to re-look at my operating models. Can you give us a walkthrough as to what that journey would look like until it gets to an actual, tangible? This is now what we're executing against.
Speaker 2:Yes, let me try. The reality is that it always depends what the problem, what you think the problem is. And you're going to change the journey because you're always trying to make the journey as short as possible and as least time consuming as possible. So it wants to have short elapsed time and short leadership time, organization people time, because all of this time one spends thinking and designing and planning. You're not doing so. You will change the journey depending on what you think the problem is. Often you end up deciding that your initial idea of what the problem was was wrong and therefore you then switch back and and you get sort of go back to square one. But how would you? How would you start? And it's slightly difficult to answer this if we don't have a particular problem in mind, but let me try and do it just the same. So we've got a management team. Now five, six people, uh, lead an organization. Maybe that organization is only 100 people, maybe it's 1,000. Maybe it's 10,000. And they have let's assume that they have decided they wanted to change something in the strategy. So they've said we want to get closer to our customers. We're getting some feedback from customers and we also think there's more business to be got from those customers if we understood them better and we tailored our behavior and our products and our services better to their needs. Right, so they would probably have already done but let's assume they haven't they would probably have already done some thinking about the customer. Okay, we need to think about who our customers are. So we want to segment them. There are different types and some who want high touch and some who want low touch, and some who want quick service and some who want cheap service and so on. So we've segmented our customers into different groups who want different things, and then we've designed some new services, value propositions for those different groups of customers. So for the ones who want high touch, we've decided what we need is a call center with slightly higher quality people in it who can interact with those customers, solve their problems in a hand-holding way, and that's going to be one of the things that we're going to change in our organization. So let's just follow that track down. So all of this is kind of strategy work that should happen before you get too much into operations Although, as you can see, you're into operations the minute you start saying, well, we probably need some people who are better trained and have more time to handle. So you would then probably sit down with your top team.
Speaker 2:Okay, we've sketched out this idea that we're going to create this separate team who are going to be available for the customers who we view require high touch and for those of you who've had various banks offer you different services. You know high net worth individual, you often get offered a banking partner who is supposed to be a sort of high touch person and we figured out how we're going to price this and we figured out. So now we need to set up an operating model to deliver this. So let's get together in a room and think through some of the main features that we're going to have for this extra of this high-touch service that we're going to do. So we're going to put the canvas on a flip chart, literally hand draw it and let's work our way through. Let's start off with okay, who's the target customer? Okay, so these are people who want high touch sales. Second, what's the value proposition? Okay, so we're going to offer and then we're going to make some statement of exactly what it is we want to offer. These Telephone answer with it, three rings of these Telephone answer within three rings, people who are available to 12 per hour, people who are able to call back the following day if they've agreed to call back the following day and all those things that normally fall down in most organizations. Those are the bits of value that we're going to be giving this customer, this type of customer.
Speaker 2:Now let's start with the value chain, or the process. What work steps are going to be needed to enable us to deliver this value? And so we'd have to think it through, starting from somewhere. Okay, so we've got a customer with a problem. They call. Step one is take the call. Step two is have a detailed discussion, understanding the customer's problem. Step three is bring in extra expertise if required. Okay, got it. So these people are going to have access to extra expertise. Who are going to jump when they say jump? That's going to be difficult. Step four is call back the following day to check if the customer's problem's been solved, and so on. So we've laid out the process Right, and as we think through that process of work, we start to think about other elements.
Speaker 2:You know jump in, you know people, power, relationships, it systems, support and so on, and then we would then kind of let those maybe scribble them down on a separate flip chart as they occur to us, but then look at them in more detail as we go around the other parts of the canvas. Then the next bit would be organization. Okay, so we're going to need some people, and what sort of people and who are they going to report to, and are they going to be a team or are they going to be individuals? Are they going to work at home? Okay, so we think through the people in the organization. These people are going to need to have some IT support, so what's going to be on that screen that they can get? So they're going to have to have access to all of this customer data. How are we going to get all this customer data to them? And they're going to need access to a lot of expert support. So they're going to be able to have to put in questions that the customer asks, just like a doctor, and access some answers, maybe that they don't happen to have in their head. So now we've thought through the screens that they need.
Speaker 2:Now, then, are they going to be working at home?
Speaker 2:Are they going to be working in the office?
Speaker 2:Are they going to be half and half? Are they going to need a building for them in the office or they're going to be half and half. Are we going to need a building for them? Do they want to be close to the engineers who go on call outs so that they can run next door and say, look, this guy needs somebody tonight. Is anyone available tonight? Or can we do that through a screen? Then we have to think about okay, and then we think about well, okay, how are we going to manage these people? What scorecard are we going to have? How are we going to measure their performance? Are they going to be on bonus? Are we going to? And how are we going to know? When you know all of that stuff? Now, that can be done in a room with the five leaders who are relevant for this bit of the organization, with the five leaders who are relevant for this bit of the organization. Obviously not as fast as I was trying to do it just now, but have good conversations.
Speaker 2:At a high level at the end of that session they will have a long list of things that they as a group want to come back to. Well, they've delegated to different members of the group to say, okay, can you chase up on this, and can you chase up on that, and chase up on that, and we'll meet back together again in two weeks' time. And I have seen, with a small organization, a whole journey done in two days. I have been involved in organizations where after two years they haven't paid as much.
Speaker 2:Absolutely that's about people and whether they're able to make decisions that's really helpful.
Speaker 1:Thank you very much, uh, for that. Uh, andrews, yeah, that was actually going to be. My next question is how long? How long should this be taking um in your mind, if it's?
Speaker 2:well, given that you're trying to do things as quickly as possible and given that, um, it depends a little bit on the urgency. But you know, if you're trying to launch a new high-touch service, then it could be quite sensible to take six months overthinking it through and making sure you've got it all set up before you launch it. You could imagine it might even take a year because you might go through a couple of iterations and realize halfway down the journey that you hadn't got the value proposition right and you had to go back and you're going to want to do some tests and so and and so um, and that's what I liked about what you said is you had the, the business.
Speaker 1:You spoke about the business model aspect first. That that's I have to start with the defined and very clear in order to go to the rest, and that's to your. That's why it would probably take longer, right? Because you need to understand the market, you need to understand what it is you're trying to do, so that all made very good sense.
Speaker 2:I see one of the problems I have and one of the criticisms I have to a degree of the work that I've seen on business architecture, which I see as the sort of IT architecture of the business, is that the tools that they use and the capability mapping tool in particular that's very prominent doesn't start with who's the customer and what's the value proposition and what's the process for delivering that value proposition. It sort of starts with what capabilities do we need?
Speaker 2:Which is sort of the same question, but it's just attacking it from a slightly different angle, and I think it often ends up with a less honed, less well-designed outcome.
Speaker 1:That's very helpful. And so once a leader's done this, and I guess the next question I have is if you're in a very complex I mean I'm just not sure if you're familiar with the term VUCA that volatile, uncertain, complex, ambiguous world that we live in I think we've just had a recent illustration of flights and so forth being grounded because of an IT glitch that occurred when designing. What advice would you give to leaders who need to build nimble and responsive, adaptable operating models and I'm going to include the business model elements into that, because it is so interwoven, but you need it to be robust as well. What's your guidance around that for leaders to make sure that you don't spend that year getting it done and the landscape's changed already in a year?
Speaker 2:You have to make a lot of changes. That really probably starts with strategy, because it's really strategy driving everything, but there isn't really a solution to this. Let's take my example of the high-touch service. So we spend a year designing and setting up an organization to deliver a great high-touch service. So we spend a year designing and setting up an organization to deliver a great high-touch service and then, for whatever reason, customers don't want it anymore. We then have to close it down again. I think there's an analogy here that some parts of operations are very unagile and some parts can be made very agile. Buildings are very difficult to make agile because you can't tear them down and rebuild them in six months.
Speaker 1:There are things you can do.
Speaker 2:You can have lots of open space, you can have movable walls, so there are things you can do. You can have lots of open space, you can have movable walls. So there are things you can do and people are doing that. But I'm sitting in an old house at the moment and it's taken us many years to get it designed and organized in the way that we like it and organized in the way that we like it. But other things are very easy to change, so you can.
Speaker 2:People are something a bit like buildings. People do not change usually, and if you are trying to make change fast, you need rather unusual people. It's about your chess checkers Some people can play both, but many can't or tennis, squash or whatever. It is the analogy you use. But people are much less flexible than you imagine, and so you know the easiest way to make that dimension agile is to have people on contract and then you can change them without too much pain. Obviously, you don't want to have people on employment contracts and then have to change them after a year or six months.
Speaker 1:It's just unfair on them.
Speaker 2:But if you've got, people who are contractors or part-timers or whatever. It's much easier, which is why organizations use consultants a lot, because consultants are a wonderful, flexible resource. You can get them doing something and then if you decide it's not such a good thing to do, you can tell them to go somewhere else. So I think there are solutions to almost any agileness you need, but you need to be very clear what sort of agileness you need. One of the things that I notice is often the thing that gets in the way of the change that the organization wants to make is the leader. And once you've appointed a leader, you have built a building, because that person is that person and they won't change easily. They're usually over 50, big over that quite a bit. Myself.
Speaker 2:I know exactly how difficult it is, so you know you could say, well, we need leaderless organizations because leaders are often a source of friction. And what's beneficial, I think, when one's thinking about agile, is being able to go through the checklist and say, well, okay, is there anything about the locations that we are setting up that make us less agile, anything about our supplier relationships that make us less agile, anything about our people that make us less agile? And think about our supplier relationships that make us less agile and think about our people that make us less agile than we want. It systems, it systems are the hardest things to change, and so on. So it's about thinking it through.
Speaker 1:That's really helpful. Thank you, andrew. A nice, real, practical answer to that as well. So we're coming up to time and again, andrew, it's been really wonderful to get all this knowledge from you. You don't get this when you read the book. It's there, it's in the pages, but the context and the discussion and the nuances this has been really, really highly advantageous. So I guess, andrew, what I'd love to know is the big favorite question is with all your years of experience through very prestigious organizations, you've learned from many prestigious universities and you, of course, have been involved in tremendous strategic and operational discussions with some very heavyweight leaders across the globe discussions with some very heavyweight leaders across the globe what would be your if this was the platform to give you a single life learning advice on what would be the one thing you would like leaders to know about effective execution on strategy through operating models today? What would that one piece of crucial advice?
Speaker 2:be. I'm not even going to answer the question exactly as you put it, because I think that the thing that I perceive is most wrong with organization is that people are very clear. People throughout the organization so this is not just leaders are very clear about who their boss is, but they're often not very clear about who the customer is, and that customer is often inside the organization rather than outside. They often do know what the external customers are, but they don't know what their internal customers are and they don't know what their value proposition is to those internal customers. So they think like Jack Welch from GE fame used to say, organizations have their face to the boss and their ass to the customer. And this is the problem, I think, with lots of people is that they are.
Speaker 2:If you think, well, what are you doing in this organization? Well, I'm working for so-and-so, no wrong answer. What you're doing in this organization is you're trying to give some value to X in department Y, and there may be three or four people you're trying to do something for which is different from your boss. Occasionally your boss is your customer, but normally your customer is not your boss. If everyone in the organization knew who their customer was or their customer is, and what value they were trying to deliver to them, independent from their boss. And that, I think, is the attempts in this modern idea of submission in organizations. But that would be my one bit of advice Get everyone right down to the customer.
Speaker 1:Thank you very much, thank you.
Speaker 1:Andrew. So that's it everyone. Again, thank you, andrew, for the wonderful episodes that you helped us put together. Lessons learned big lessons learned for me is operating models. Keep them simple. It's a wonderful checklist and diagnostic to see what the health of your current operating model is, and it's also a tool to help you reconfigure and looking at how to redesign it. But it doesn't need to be this big organizational behemoth. It can be used for a department, it could be used for a team, it could be used for any place that has a particular strategy to deliver, to help them understand how to best structure themselves to deliver against that strategy.
Speaker 1:Which brings us to the next big lesson. You cannot successfully go and create an operating model unless you know what your business model is, your value proposition in particular, as well as who your customers are and how you're going to deliver that value proposition to them. Then, as you've mentioned now, it's knowing who that customer is. It's not your boss, necessarily If you're inside an organization. It's knowing that your customer, who your customer is in that organization, what the value proposition you are supposed to be delivering them to them is supposed to be, and that operating model is going to help you then go and uh structure yourself to deliver more effectively that value proposition to that customer. So, uh, so much was learned.
Speaker 1:I've got a lot more clarity and you know we'd hope so, given that the title of this is the Search for Clarity. So I got a lot more clarity. I hope everyone else has got a lot more clarity about the publication. I will have links to the publication. I'll have further links to Andrew Campbell as well as links to the YouTube videos as well videos as well. Do check out episode one if you've missed it and stay tuned for our next podcast We'll be announcing in the next two weeks or so. Thank you very much everyone, and I hope you had a good journey with us while we search for clarity.
Speaker 2:Thank you.
