Remote Operating Model Design

what does a modern operating model look like?

This is the first article in an eight part series. Continue reading:

Part one | Part two : Step 1 | Step 2 | Step 3 | Step 4 | Steps 5 & 6 | Step 7

2020’s pandemic showed the world what many had argued for years: that workers can actually be more engaged and productive outside the office environment. It also showed us the significant environmental and social benefits of reducing the daily commute.

2022 will see battle lines drawn: in the red corner, those who believe that working from anywhere is the future of work; in the blue corner, the significant financial interests behind city commercial real estate and leaders who need to see their teams working to trust that they are working.

At remote:af we strongly believe that the remote working genie is out of the bottle and is here to stay. Organisations which design operating models where location is irrelevant, and team agreements that give people agency over where they work, will have a critical talent advantage and enjoy long term business success.

remote:af Operating Model Design is an exercise that is performed on a regular cadence to tune the operating model to context:

  • exploring changes to the customer, supply chain and strategy;
  • aligning on design principles;
  • exploring and challenging constraints to how teams organise;
  • designing how work flows through teams to the customer;
  • agreeing on the operating rhythm;
  • clarifying governance; and
  • planning the implementation of any changes.

It is supported by the remote:af Operating Model Canvas, which provides a semi-structured space for facilitated exploration and collaborative design:

remote:af operating model design canvas
remote:af operating model design canvas

Unlike traditional approaches to operating model design, remote:af is context sensitive, collaborative, and principles rather than pattern driven.

Many organisations will tackle the challenges of shifting to a permanent remote or to a hybrid remote model in the coming months. Our aim with remote:af Operating Model Design is to disrupt the management consulting industry by empowering teams with a more sophisticated pattern than the consultants themselves use.

Consultants can be a powerful asset to the process as expert facilitators with knowledge of how other organisations do things, but key design decisions must be vested in the people who have in-depth knowledge of the organisation’s unique context.

Guiding Principles

Guiding Principle 1: Be cognisant of the benefits and challenges of remote working

Remote working can activate high levels of personal productivity, assuming that your people have an environment that is conducive to working (refer to our earlier blogs on situational empathy).

However, remote working will also highlight the gaps in your operating model. In a remote working environment, there are no water cooler or lunchroom table conversations for accidental alignment. Without intervention and careful nurturing the social networks that act as checking systems will likely diminish.

For this reason, you need to be very deliberate about the value chain of delivery to your customers. You can’t just lift and shift your existing operating model, you need to purposely design it for remote working effectiveness:

The ideal design for remote working is a set of independent teams that are capable of delivering value to the customer with minimal dependencies. However, this is not always possible due to organisational, architectural or capability constraints, nor is it always economical.

Interdependent teams that operate in value chains are sometimes necessary and can be effective if integration points are carefully designed and explicit, and the teams have a clear understanding of; and, visibility into; their upstream and downstream dependencies.

Furthermore a shift to remote or hybrid working can significantly reduce operational costs, in the order of ~$5-15k USD per head. These savings can be banked which the CFO will love, but the best organisations recognise that redeploying some funds to make working from home safer and more comfortable, to provide options for people who don’t have environments conducive to working, and to enable teams to get together in small or large groups for social activities, can have significant benefits for engagement and cohesion.

Guiding Principle 2: Build Operating Model Design Muscle Memory

Revolutionary, large-scale change to an operating model is sometimes inevitable due to a sudden change in landscape, but this should be the exception rather than the rule. Organisations are human systems and are vulnerable to large scale change.

The pioneering therapist Virginia Satir explored the impact of change in family systems. Steven Smith, Mike Burrows, and the Kanban community have used it as a metaphor for organisational change:

Whilst the Smith / Satir model originates in small social systems, viewed through the lens of systems theory we can extrapolate some critical insights for larger ones::

  1. Most changes to the design of an organisation will result in a dip in performance due to disruption of social systems
  2. The larger the change, the greater the disruption, and the longer it takes for the system to process it
  3. There is no guarantee that a change in an organisation or operating model design will lead to higher performance. In fact, change often has a negative impact.

Additionally, it’s important to note that remote working reduces some of the barriers to operating model change. Without the politics of desk and wall space and the constraints of the physical environment it is a lot easier to make small changes without a whole lot of disruption and fanfare.

For this reason remote:af organisations don’t make a habit of putting a management consultancy into a closed room with a set of org charts and the P&L, instead they take responsibility for ensuring that Operating Model design is:

Performed on cadence in alignment with strategy

On the same cadence as the strategy cycle, leadership re-evaluates the operating model design to ensure fitness for purpose. Regular review of the operating model in alignment with strategic cadence ensures that most changes are small and targeted; and, builds muscle memory and expertise to make change easier.

We lean towards prototyping change and scaling out context-proven models, as per Gall’s law: “A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working, simple system.”

Working smaller, prototyping, measuring and learning is a far more effective way to drive change than top down models built on powerpoint.

Context rich

remote:af organisations use people with the knowledge of the political, technological, regulatory and social constraints together to collaboratively design the organisation. They have a bias towards inclusivity.

Open and transparent

Change is the only constant and remote:af organisations don’t hide behind bureaucracy or consulting brands. We are open and transparent about needs and we treat people like adults.

Separated from structural change

remote:af operating model changes are ideally prototyped before being codified in HR systems and policies. If operating model changes are successful and are producing value they can be more permanently implemented in job titles, role descriptions, policy, structure and reward mechanisms, but we work on a test-first principle. Structural change is costly to implement and hard to rollback if you get it wrong. For this reason we also lean towards flexibility in job titles and descriptions where plausible.

Not a performance management mechanism

Operating Model change is not about managing underperforming people, it is about realigning capability to meet demand. Managing performance is critical for any organisation and, done well, should not result in constructive dismissal via operating model changes.

This is the first article in an eight part series. Continue reading:

Part one | Part two : Step 1 | Step 2 | Step 3 | Step 4 | Steps 5 & 6 | Step 7

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