The operating model question is: how does this organisation need to work differently in order to get value from this technology? It covers five dimensions: decision rights, workflow design, performance metrics, management routines, and team structure. Most transformations change the technology. Few systematically change the operating model to match it.
New technology, old ways of working
Here is a pattern that repeats with remarkable consistency across digital transformation programmes. A new system goes live. It works broadly as specified. The implementation team declares success. And then, over the following six to eighteen months, the expected business value quietly fails to materialise.
Usage is lower than projected. Processes that were supposed to be faster aren't. Decision-making that was supposed to be more data-driven isn't. The technology is there. The value isn't.
The diagnosis, when someone eventually does it, is almost always the same. The organisation implemented new technology on top of old ways of working. The decisions that the technology was supposed to inform are still being made the same way, by the same people, in the same meetings, with the same information — just with a new system running in the background that generates data nobody is systematically using.
Technology does not change how an organisation works. It creates the possibility of working differently. Realising that possibility is an operating model problem, not a technology problem.
What an operating model actually is
The term gets used loosely, so it's worth being specific. An operating model defines how an organisation delivers value day to day. It has five core dimensions, and digital transformation touches all of them.
Decision rights
Who has the authority to act on what? In many organisations, a new digital system makes real-time data visible to people who previously didn't have it — but nobody has explicitly given those people the authority to act on it. The data is there. The permission isn't. The result is that decisions still get escalated to the same senior levels they always did, defeating the purpose of the technology.
Ask: who can act on what this technology makes visible, and do they know it?
Workflow design
How does work move between teams and systems? Digital transformation typically automates or digitises parts of a workflow — but leaves the surrounding process unchanged. A document that used to be emailed is now in a system; but it's still reviewed and approved in the same sequential order, by the same people, with the same handoffs. The digital step is faster. Everything around it isn't.
Ask: has the end-to-end workflow been redesigned for the new system, or has the new system been inserted into the old workflow?
Performance metrics
What gets measured determines what gets managed. If a digital transformation is supposed to improve customer response times but the organisation continues to measure and report on inputs rather than outcomes, the transformation's impact will never be visible — and therefore will never be actively managed. New technology requires new metrics, and new metrics require someone to define, track, and act on them.
Ask: have the KPIs been updated to capture what the technology is supposed to improve?
Management routines
What do leaders review, when, and with what data? Management routines — the regular meetings, reports, and reviews that structure leadership attention — are among the most powerful and most neglected levers in a transformation. A new system that generates real-time operational data but is never reviewed in any leadership forum will not change how the organisation is managed. The data will be ignored because no routine exists to use it.
Ask: which management routines need to change to incorporate what this technology makes possible?
Team structure
Does the current structure support or obstruct the new way of working? Some digital transformations require people or capabilities to be in different places than they currently are. A customer service transformation that centralises data but leaves teams organised by region may find that the data integration creates no benefit because decisions are still made locally, without reference to the central view. Structure follows strategy — and when it doesn't, strategy fails.
Ask: is the current team structure compatible with how this technology is supposed to create value?
Why the question gets skipped
The operating model question is genuinely hard to answer, and it requires conversations that many organisations prefer to defer. Changing decision rights means taking authority from some people and giving it to others. Redesigning workflows means telling people their current process is wrong. Updating management routines means asking senior leaders to change how they spend their time. These are political as much as operational challenges.
By contrast, the technology decisions — which system to buy, which integrations to build, which vendor to select — are comparatively straightforward. They involve spending money, not navigating organisational politics. So transformations gravitate towards the decisions they can make comfortably, and defer the ones they can't.
The result is a transformation that solves the easy problem and leaves the hard one untouched.
When to ask the question
The operating model question should be asked before technology selection, not after implementation. The reason is simple: the answer shapes what the technology needs to do. If the transformation requires changes to decision rights, the technology needs to support different access models. If it requires new management routines, the technology needs to produce the right reporting. If you answer the operating model question after the technology is in place, you may discover that what's been built doesn't support the way the organisation needs to work.
In practice, many organisations are already mid-transformation when this realisation arrives. If that's the case, the sequence becomes: map the gap between the current operating model and what the technology enables, prioritise the changes with the highest impact on value realisation, and build those changes into the programme — even if it means revisiting scope and timeline.
It is always cheaper to address operating model gaps during transformation than to retrofit them afterwards, when the organisation has already concluded that the technology didn't deliver what was promised.
Three questions to ask before your next transformation programme
- What decisions will be made differently because of this technology — and have we given the right people the authority to make them?
- Which management routines need to change to incorporate what this technology makes visible — and have we scheduled those changes?
- Where does the current team structure or workflow design obstruct the value the technology is supposed to create?
If you can answer all three specifically — not generically — you are further ahead than the majority of transformation programmes we've seen. If you can't, you've found your work.
Digital transformation fails to deliver value when new technology is implemented on top of old ways of working. The operating model question — how does this organisation need to work differently to use this technology? — must be answered across five dimensions: decision rights, workflow design, performance metrics, management routines, and team structure. Ask it before technology selection, not after go-live.
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