The document outlines a 3-step process to develop a target operating model for an organization: 1. Create a current operating model by evaluating the customer journey, value chain, organization skills, mindsets and behaviors, and key metrics to baseline current performance. 2. Use the current operating model and input from stakeholders to develop a target operating model that provides a blueprint for the future and prioritizes improvement activities. 3. Deliver targeted projects to move the organization toward the objectives laid out in the target operating model, aligning limited resources to drive effective and efficient change.

1. Ray Fagan
Interview Presentation – Delivery of a Strategic Business Review
Ray Fagan
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2. A Current Operating Model creates a clear baseline of current business performance. The
creation of a Target Operating Model will help the organisation to deliver greater value to the
Customer more quickly, using less resources and at lower cost.
The 3 step process builds an accurate picture of the business, consolidates & clarifies direction and then allows
the delivery of smaller projects to move towards the target*.
Voice of
Customer
What do our Customers value ?
Organisation
& Skills
How does our organisation deliver customer
value ?
Value Chain
What processes do we use to deliver
Customer Value ?
Mindsets &
Behaviours
How do our day to day practices help
deliver value to the Customer?
Measures &
Metrics
How do we measure our delivery of value to
our Customers, Employees and Stakeholders ?
A 5 segment view of the organisation
ensures that we understand & engage the
whole business
Discovery
Discovery – Evaluation Delivery Mobilisation–
* - Projects or initiatives underway or identified for rapid mobilisation will not wait for the end of a phase.
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3. Discovery – Evaluation
Aligning the 5 Lens approach to the Customer Journey, we highlight waste, uncover ideas for
improvement and engage the employee population, this is summarised in a Current Operating
Model
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• Walk the Value Chain, meet key stakeholders, understand
“How” each stage is delivered.
• What works well and why ?
• What doesn’t work so well and why ?
• No constraints - what 3 things would you change right now ?
• What do you want me to change ?
• What don't you want me to change ?
• Data gathering through face to face, presentations, group sessions.
Current Operating
Model
The Current Operating Model
-
Customised to the Audience
Board – Management - Employees
Voice of
Customer
Organisation
& Skills
Value Chain
Mindsets &
Behaviours
Measures &
Metrics
Critical To Customer
Critical to Business
Customer
• Delighters
• Satisfiers
• Dis-satisfiers
Employee Engagement
Scores
Objectives & Measures
LeaderManager Day in
Life Of.
Strategy Execution
Employee Environment
Customs & Practices
Skills matrices
Spans and Layers
Std Op Procedures
Audit Hierarchy
Inherent
Continuous
Improvement
Capability
Balanced
Scorecards
• Quality
• Cost
• Delivery
Cascaded measures
Value Stream Map
Overall Process
Efficiency
Current State &
Future State
Processes
Detailed Outputs*
* - Not exhaustive list, dependant on business area the approach is customised to focus on the key
contribution to the business from the dept, team, function 3

4. Using the Current Operating model as a baseline, the Target Operating Model provides the
blueprint for the future. This shapes the change portfolio moving forward, aligning the
limited resources of the organisation to be effective & efficient in delivering change
Delivery of projects to
deliver Target
Project Delivery
Board
Projects sized
and selected*
* Dependant on the scale, complexity and resource required, the decision on which project to undertake would
be agreed at the appropriate governance level
Progress, Decisions
and Escalations
• Syndicate, discuss and
iterate through 1:1’s,
Group Sessions, Wider
publication
• Baseline vs. industry
and best practice
• Create “So What” to
focus discussion on
areas of greatest R.O.I.
Current Operating Model
is the baseline for
Future Operating Model.
Input & discussion with key
stakeholders to align to broader
strategic and environmental
considerations
Target Operating Model
is created with a
heatmap of priorities &
activities to deliver
Current Operating
Model
Target Operating
Model
Board Ease
ROI
H
H
L
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5. Assumptions
• Co. Name are a successful and profitable business, there is no need for crisis management or
transformational change.
– Co. Name have done this by responding to demands of their customers through product quality and service.
• Co. Name currently do not have a consolidated & documented current or future business
operating model.
– There is a recognised need to baseline the current business in terms of process, the customer journey, the supply
chain and supporting business functions.
• There is an appetite for improvement activity to become part of the daily business cycle
within Co. Name.
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