Business and Target Operating Model

Whether climate change, COVID-19, geopolitical conflicts or digitalisation – companies need to rethink their business models and make them more resilient. However, without the further development of the operating model, the strategic transformation often falls short.

Overview

When adapting business models, the focus should be on the synthesis of core competencies, resources, and customer needs. Increasingly, however, sustainability must be integrated into the business model beyond customer needs – otherwise there is an increased risk of regulatory disruption.

For us, it is important that, when transforming the business model, the existing operating model should be examined and, if necessary, adapted or even newly developed. In this way, strategy, organisation and operational processes are linked and the sustainable implementation of the new business model is made possible.

Reflecting on the business model and the corresponding operationalization of the strategy in the form of a target operating model makes sense both in the case of imminent disruption of the market environment and an acute threat to the competitive position. In the context of post-merger integrations, a reconsideration is also advisable due to new competences and target groups.

Services

Actively shaping change

Questions for the team

Which situation would you name as a typical reason for a systematic transformation of the business model and operating model?

A classic trigger for an acute need for transformation can be the entry of new competitors into a market, often combined with the introduction of innovations. However, in view of the disruption in many industries and the increasing demands in terms of the sustainability of business, there are also regular starting points for reflecting on the core elements of the business model in other entrepreneurial situations. Some markets are significantly more affected by acute crises or structural change, be it the automotive industry, mechanical and plant engineering, retail or the consumer goods sector – our sector-specific pages and studies offer a good insight into this. Particularly in these sectors, a regular, neutral review of the business model and target operating model can be indispensable to ensure the company's long-term survival.

How can one imagine the distribution of roles between management, the departments and FTI-Andersch in workshops?

Initially, bilateral talks are held with the management. This gives us a first impression and enables us to define the focus and goals of the workshops. The final objectives, options for action and measures are developed jointly by all workshop participants – we see ourselves as an impulse generator and moderator. In this way, the interpersonal dynamics of workshops are harnessed, and, at the same time, work is done in a goal-oriented manner. It is important for the acceptance of the initiated change processes that all affected departments are involved at an early stage. Detailed documentation and development of the action plan is an important component of the follow-up – in our experience, this is of central importance for medium-term implementation.

What makes the Target Operating Model so important for implementing a business model?

The business model reflects how a company functions and defines how profits are made. However, without a detailed Target Operating Model there is no clear plan of what implications this has for the day-to-day business and the necessary structures and processes of the company. An efficient and well-thought-out target operating model thus offers an important lever to make the requirements of strategic decisions tangible and realisable.

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