This is the fourth article in a multi-part series:
Part one | Part two: | Step 1 | Step 2 | Step 3 | Step 4 | Steps 5 & 6 | Step 7
Step two: agree on design principles
Agree on Design Principles
If you can agree on the principles for operating model design then the task of designing how you will organise to deliver value becomes a lot more simple. remote:af recommends the following design principles as a starting point:
In an operating model design process we normally provide a little bit of education around generic operating model design concepts and design principles before asking the group to craft a set of design principles that are unique to their organisation.
Here is an example from Reform Clothing, an Australian scale-up that helps groups build identity through apparel and aims to make a significant impact on the sustainability of the garment industry:
Throughout the design process you’ll run into some challenging questions that don’t have a right or a wrong answer, so it’s useful to have a bit of a think about some of the curlier aspects up front. Once we have an agreed set of design principles we can explore some of the tension through the use of sliders, e.g.:
Enduring teams vs Labour flexibility
A focus on enduring teams usually leads to a higher proportion of permanent labour over contingent (contractor / consultant) labour. This is great for maintaining knowledge and building strong teams but can cause challenges if funding is volatile or trending downwards.
Small teams vs Fewer dependencies
Small teams tend to be more effective but may lead to more complex dependency management if there is not also a focus on engineering the dependencies out of the system through capability development or engineering.
Distributed authority vs Central control
Distributing authority to teams can create autonomous high performing units but requires high calibre talent that has been carefully inducted, clear information flows and decision making frameworks. It can lead to a loss of visibility and control at leadership level and also simply won’t work with some leadership styles.
Shared knowledge vs Feature throughput
By identifying knowledge constraints and resolving them by distributing that knowledge through teams, we can gradually make the system more resilient to key person risk. However, this can come at a cost to short term throughput.