Five steps to an agile operating model

The chances of success for companies that can continue to be competitive in the future with the traditional Taylorian top-down system are rapidly declining. The long-successful principle of command-and-control is now seen as too rigid and too slow to satisfy changing customer demands. What is required today is greater proximity to customers and more flexible reactions to their wishes. The Business and IT service provider CGI has developed the following five steps on the way to a agile operating model identified as a guide:

1. Reshaping the value chain: In an agile organization, the operating model is thought from the customer. At the center of the changed value chain are decentralized teams in which employee know-how from different areas is bundled. Particularly important are the elements with direct customer contact, such as sales, marketing and service functions, which determine the perception and experience of the customer, and thus their purchasing behavior.
2. Decentralized business structure: Responsibility and decision-making authority for the operational business is shifted away from the central functions to where contact with the customer is most intensive. Decentralized activities and decision-making powers are thus given a much stronger weighting, while central activities are limited only to the most necessary functional areas. In this way, customer requirements can be recorded more precisely and fulfilled more quickly.
3. Added value for customers: The more intensive customer contacts of the decentralized teams make it possible to better capture customer wishes and to create real added value from this knowledge. They decide how the value chains must be designed with the operating models and processes (business imperatives) and the means of production (assets) such as vehicles or production capacities. It is aligned in such a way that the company can offer its customers the greatest possible benefit.
4. Development of the necessary skills: Based on the customer experience, the decentralized teams also review the necessary skills (capabilities) to fulfill the customer's wishes. They determine which skills are required. Any gaps or weaknesses are closed or eliminated through internal measures or with the help of external partners or the partner ecosystem. This is also decided independently by the decentralized teams.
5. Design of the organizational plan: The changed organizational structure shifts a large part of the decision-making authority from central functions to the decentralized agile teams. They are in communication with each other and have interfaces to the central functions such as finance or human resources. This enables a high decision-making speed in the operative processes. And last but not least, scope for planned continuous improvement of the teams is part of the design of the organizational structure. 

"Companies that are close to their customers, flexible and decentralized prove to be superior, regardless of their industry. They can react faster, more flexibly and more innovatively to changing customer requirements and operate more profitably by consistently focusing on the value chain," explains Dr. Finn Breuer, Executive Consultant and Head of Business Agility & Consulting at CGI in Germany. "When designing - or in most cases re-designing - the respective operating model, the described five steps can help to proceed in a structured way. Ultimately, the goal is to get horsepower on the road as quickly as possible in terms of competitive advantage. Of course, it helps if the location and size of potential potholes on the route are known in advance."

Source: CGI