Global food packaging manufacturer, 1bn revenue, 18k employees

“Create an operating model that allows cross-unit and global collaboration. Help us eliminate waste and become more intentional with our R&D investments.”

Approach

  1. Assess the needs for an R&D operating model

  2. Surface common frameworks and vocabulary for R&D innovation operations

  3. Create case studies of operating models across competitors, customers and comparators

  4. Create bespoke operating model hypotheses, including R&D strategy, taking into account multiple sites, segments and brands

  5. Evaluate hypotheses, create recommendation and persuasive storytelling to align with leadership team

Operating model Landscape & Principles

Case studies revealed several overarching operating model principles that would allow my client to make informed decisions. The operating model needed to fulfil these criteria to continually unlock latent and create incremental value:

  • Coordination of organisational collaboration and continued communication

  • Definition of the process, required inputs and outputs

  • Definition of roles and expectations on functions within the process

  • Definition of strategy, objectives, divers and metrics of success

The landscape within which the operating model needs to function is comprised of two key dynamics:

  1. Leadership: Where does decision-making happen? Top-down at group level, or bottom-up at a team or site level? Is decision-making shared? To what degree?

  2. Drivers: Does the organisation respond to external factors such as customer requests or market dynamics? Do existing capabilities set the agenda? Or does the organisation have a strategic vision that it’s driving towards, thereby shaping market dynamics pro-actively?

Hypothesis Models

The operating model principles and organisational dynamics taken together surfaced 4 operating model options that were at extreme ends of the spectrum. Why at the extremes? The creation of hypotheses on the edge allows for better decision-making as it reveals stark contrasts that can then be dialled down entering the refinement phase. The four operating model options comprised:

  • Front-loading capability: decision-making is driven by sites and focusses on maximising value through existing capabilities

  • Front-loading customer insight and market foresight: decision-making is driven at the top (strategic direction) and bottom (e.g. sales) where customer interaction takes place

  • Front-loading exploration (the ‘front-end’): decision-making is driven by customer insight, individual employee and team creativity

  • Front-loading company vision: decision-making is driven by company vision and strategy and focusses on shaping the marketplace

Keywords: operating model, business design, operations, innovation, strategy

Case Studies and Operating Model Blueprints

Operating models are the connecting tissue between strategy and customers. The value creation process that makes vision a reality and solicits reactions from customers as they perceive the value created. The initial request (the need for an operating model) surfaced gaps: unfocussed R&D strategy and underused customer insight.

Implementing the recommended operating model required extensive stakeholder engagement with persuasive communication.

The case studies aided the process of engaging leadership, showing best-in-class models and competitor practices. The principles used as guardrails to design a fitting operating model was informed by insights from this research that were then translated and synthesised into actionable jobs-to-be-done. JTBDs are usually used in a consumer context, however they are a useful tool to articulate design criteria in this context as people working in an organisation are, so to speak, customers of an operating model.

Another commonly used framework was employed to help visualise the strategic directions or landscape for R&D innovation: the Innovation Ambition Matrix (Bansi Nagji, Geoff Tuff). An organisation needs to decide what type and mix of innovation they pursue as different ‘horizons’ will imply different investments and consequently competitiveness. Which horizon and what mix depends wholly on the industry and economic health of the organisation. Once a strategy such as this is in place the organisation can begin to contemplate how to make it happen, i.e. design the operating model.

Would you like your copy of operating model hypotheses?

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