Is Your Operating Model Obsolete?

old modelsSupplier CEOs are beginning to realize that value from traditional business streams is eroding at a faster rate than expected.

Some blame bad strategy or process when results come up short, when it may be more accurate to look to an increasingly obsolete operating model as the culprit.

(An obsolete operating model is usually accompanied by a nostalgic attachment to a very different place and time. Dangerous and irrelevant to today’s environment, something to stay alert to and redirect.)

What to do now begins with re-framing what’s known:

  • The customer–not the manufacturer–appraises the value of the transaction and the engagement. How do we know? Because customers are much more willing to experiment with a variety of options and new means of value creation.
  • Supplier executive teams may be too imbedded and insular to bring about anything but incremental improvements by floating new industry behaviors onto current operating models. But customers are no longer interested or willing to pay for the limited value incrementalism provides.

These truths make it very easy for customers to walk away from established business relationships.

Product innovation and strategies will disappoint without first embracing the possibility that your operating model may need an overhaul.

Systemic innovation must now be on the table. But changes to how the game is played will probably not come from inside your organization.

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One thought on “Is Your Operating Model Obsolete?

  1. JIm Klass says:

    Well put! We need to move away from gut to data drive insights. The days of unceasing product launch of “new & improved” are in the past.

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