Build the engine that supercharges your growth strategy

“Whether they’re trying to grow organically or attempting to drive growth after a transaction, many companies just don't pay enough attention to the operating model.”

Jonathan Eaton

Grant Thornton Growth Advisory Principal

To be successful, an enterprise’s growth strategy needs to be supported by a strong, well-functioning enterprise operating model.

“Whether they’re trying to grow organically or attempting to drive growth after a transaction, many companies just don’t pay enough attention to the operating model,” said Grant Thornton Growth Advisory Principal Jonathan Eaton. “If they’re going to hit their growth targets, it’s imperative to look carefully at their operating model.”

Each of the elements of an effective operating model is essential for supporting growth goals. A company that’s severely lacking in any of these areas will quickly find itself collapsing under the weight of an unsustainable vision.

“You need to understand the cultural impacts of the operating model optimization and help your people navigate through this change journey.”

Tom Joseph

Grant Thornton Growth Advisory Principal

Establishing a culture that sustains growth is important. If innovation is the key driver of your growth strategy, you’d better cultivate a strategy that encourages your people to experiment and doesn’t punish them for ideas that fail. Cultural sensitivity also extends to the enterprise operating model improvement process itself.

“Alignment to this operating model change doesn’t need to be jammed down their throats,” said Grant Thornton Growth Advisory Principal Tom Joseph. “Every operating model change has an impact on people. You need to understand the cultural impacts of the operating model optimization and help your people navigate through this change journey with a sense of purpose related to their contributions to the business objectives.”

Another essential cultural objective is cross-functional collaboration.

“You want the teams from different areas within the organization…to share the same vision and drive toward the same goal.”

Rachel Wieder

Principal, Growth Advisory

“You want the teams from different areas within the organization, whether it’s finance or supply chain or HR, to understand and share the same vision and drive toward the same goal,” said Grant Thornton Growth Advisory Principal Rachel Wieder. “You want to have people understand and agree on their roles and responsibilities.

Process: By fixing or replacing inefficient processes, organizations can often realize benefits in both their revenue and cost metrics. One tactic that many leading companies are embracing — often with the help of third parties — is process mining, which involves extracting and analyzing the digital event log data within systems to gain an in-depth understanding of transactional processes.

Leadership may have a hypothesis about what’s right and wrong with their processes. Process mining can confirm or disprove those hypotheses and expedite process improvement. Done right, this activity will make mapping of current processes easy and enable transformation of processes for a future state that aligns with the organization’s growth strategy.

“You can mine the data to identify the gaps and issues, and it really accelerates the delivery of process transformation,” Eaton said.

Companies with sensitive data — for example, healthcare providers — that use this technology need to make sure they are complying with data protection regulations as they mine their data. But when processes are improved, controls throughout the organization are also typically upgraded. Process improvements identify poor controls, poor discipline and people operating outside the boundaries of controls, enabling the creation of a stronger control environment.

Technology: First and foremost, the right technology enables effective processes and scalable growth. Technology needs to be configured correctly to bring these processes to life and enable them to execute.

When done correctly, the enterprise operating model design integrates different types of technology that are fit for various purposes across the organization, based on the needs of the different functions.

“In banking, for example, improving efficiency and effectiveness is very important right now,” Joseph said. “They’re looking for ways to scale their business differently. They’re looking for more customer-facing opportunities for self-service. They’re looking at top-line revenue opportunities associated with increasing their customer base. Technology plays a key role in all of this.”

In each case, it’s important to identify the business need and find the appropriate technology to handle it, rather than applying the most popular new technology just because everybody is talking about it. “I want to use AI because I think my competitors are using it” is not an effective tactic in your enterprise operating model.

A more useful approach is, for example, to identify high-transaction processes with significant manual inputs and use robotic process information to decrease labor needs and improve data integrity. In some cases, AI might indeed be the technology you need, but it’s always important to select the right tools for the particular use case.

Organizational design model: Supporting growth requires an evaluation of the capabilities that exist within the organization and an identification of gaps that need to be filled to deliver on a company’s short-term goals and enable the accomplishment of objectives in the more distant future.

Leaders need to understand if they have the right people and skills; if they don’t, they need to figure out how to get the resources they need. As the operating model evolves, leaders need to communicate skillfully, explaining to people their role in the changing model and what it means for how they do their job on a day-to-day basis.

People need to be trained. Adoption needs to be tracked. And leaders need to make sure people don’t revert in a few days or a few weeks back to the same inefficient processes they performed previously. A data-driven approach enables this transformation of roles and responsibilities.

“When you have alignment to strategy and you’re creating the operating model, you can measure this with your key performance indicators,” Wieder said. “If it’s an agile model, you look for continuous improvement and regularly assess and adjust the model based on those performance results.”

Data: Without the right data, the rest of the elements of the enterprise operating model fall apart. Your data provides the building blocks for every system and process.

“There has to be an emphasis on evaluating the efficacy and the integrity of the data,” Eaton said. “If there are issues, there has to be a commitment and an intentional effort to scrub and clean data so it is fit for purpose to execute on the operating model and enable people to make the right decisions.”

Having the right controls over data enables integrity and sustainability to drive the right decisions in the present and the future. And having the right data and visibility into that data enables effective risk management.

Reporting: The right reporting and analytics enable the business to pursue growth in a way that’s proactive rather than reactive.

“Successful enterprise reporting model design allows management teams and departments to have access to the reporting and information they need to deliver on their objectives,” Eaton said.

This is an area where improved technology has led to rapid advances in the past several years. Advanced algorithms using increasingly rich data sets have enabled internal reporting that leads to more effective and timely decision-making.