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Operating Model Canvas
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Other publications by Van Haren Publishing
Van Haren Publishing (VHP) specializes in titles on Best Practices, methods and standards
within four domains:
- IT and IT Management
- Architecture (Enterprise and IT)
- Business Management and
- Project Management Aligning operations and organization with strategy
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ABC of ICT ArchiMate® A4-Projectmanagement Canvas
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CATS CM® Novius Architectuur Methode ICB / NCB
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COBIT® MINCE®
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ISO 20000 BABOK ® Guide MSP®
ISO 27001/27002 BiSL® and BiSL® Next P3O®
Andrew Campbell
ISPL BRMBOKTM PMBOK ® Guide
IT4IT® BTF PRINCE2®
Mikel Gutierrez
IT-CMFTM EFQM
IT Service CMM eSCM Mark Lancelott
ITIL® IACCM
MOF ISA-95
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Foreword
Colophon
Nigel Slack,
Emeritus Professor of Operations Management and
Strategy, Warwick University, and author of best selling text books
TITLE Operating Model Canvas Operations Strategy and Operations Management.
SUBTITLE Aligning operations and organization with strategy
AUTHORS Andrew Campbell, Mikel Gutierrez, Mark Lancelott
PUBLISHER Van Haren Publishing, Zaltbommel, www.vanharen.net
TEXT EDITOR Steve Newton (Galathea) There is an enduring dilemma that follows anyone charged This is an important book for two reasons. First, it provides a
BOOK AND COVER DESIGNED BY Coco Bookmedia, Amersfoort - NL with making strategy have a real impact. ‘How do you think big first-class guide on how to put an effective operating model
NUR CODE 801, 982 while keeping your feet on the ground?’ ‘How do you translate together. Andrew Campbell and his co-authors have taken
ISBN HARD COPY 978 94 018 0071 6 the broad vision of where the enterprise wants to be into a the proven idea of a Business Model Canvas and created an
ISBN EBOOK (PDF) 978 94 018 0072 3
set of practical and realistic plans and actions?’ This is where Operating Model Canvas as a way of extending the number of
the idea of the operating model fits in. It is a concept that operating elements that are considered from three (activities,
EDITION First edition, first impression, March 2017 has been gathering momentum in the strategy field – and for resources, partners) to six (processes, organization, location,
First edition, second impression, June 2017 good reason. Operating models have the potential to provide information, suppliers and management system). Of course
First edition, third impression, with minor corrections, July 2017 a high-level design for any type of organization that both there are many other ways of defining and presenting the
COPYRIGHT © Van Haren Publishing, 2017 defines its structure and style and enables it to meet its business idea of operating models. Every consultant has his or her own
objectives. Done well, an operating model should provide a “model”. But Operating Model Canvas is the first attempt, as
clear, ‘big-picture’ description of what the organization does, far as I am aware, to document and share both the concept, a
All rights reserved. No part of this publication may be reproduced in any form by print, photo print, microfilm across both business and technology domains. It should provide complete set of tools and worked examples. Second, the book
or any other means without written permission by the publisher. a way to examining the business in terms of its key relationships, is exceptionally well illustrated, with easy-to-follow steps and
Although this publication has been composed with much care, neither author, nor editor, nor publisher can
especially those between the business functions, processes a wealth of engaging and insightful examples from all types of
accept any liability for damage caused by possible errors and/or incompleteness in this publication.
and structures that are required for the organization to fulfil enterprise. I commend it to anyone involved in turning strategy
its mission. It should fit alongside the organization’s business into operational designs and choices.
model in a way that helps convert strategy into a working model
Trademark notices
of how things need to be done in practice. A good operating
ITIL® is a registered trademark of AXELOS Limited.
model is a prerequisite for building effective change in the
Business Model Canvas is a registred trademark of Strategyzer AG
organization.
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Endorsements
Patrick van der Pijl,
SRImvA– ah niailtamudinscva ryedebp iwyhflseeloti ifaalnnalroncesywdt.wr i vE eh evidain edsa s nrAcdiygond v th-adiK amtnrsTuet.ewta ohTh gh’hoseeec irssC s t fbaa8shomkotraeo0 p,rcskt b u / ofaiessrn2tlo ulo n’msa0mot wt he aoeor Pxposfirc ikrc–errm , pw a iht’nsniioeto dcvh ncfa to.pilhpu nleeettlane rhpis buureuosretep e obftsohs ieret iiosr nt selAadan li nnionprdetdgo c h rh tttaihufotpoignripltdei oe–, le vn iofat os wflpu r twriertoa haivns rit ddslhofe!ioss sTrt aom abpo bayp tortriioohfdtanegec enfiph rfrm.moorjae anmcnatasdg,n e iaatrlssgl ecppruuoss sintfhorto imtnmhgee rtiisrhn .p e Tt ehhsttea rp ats rtawoemjgielleyc ttso teccsbhoohaCDoeDsmnol yoieEvueOkB psketselOuipdlo irge gcsseB o nxioaarnnruBie,lufattiel snaiy Dtlouisb .didgn nsDneeIs . e tbgs saM eiAsoi hne gsaMbnslo e enlrcMu oldioa opygssauerodonsisn enln uBed sy Cedilfreeod Masu aCtlbuset tl nhG aloer o iBtevsnoeroeoad d vfaenkBH s aeg t ea utdossoaolrssths iwnoa h fiepeno fitdle.silae Inrco fnl AVpr sauen otcsla n l lB, ctrs ol ad. auut Vttfse uraehta ac epa wss ealtn Pu khl sfideardns.eaero ei no Bem d npPeeduaoeesropxisgol oeuaycsseohpdki amtrfto so pihtbtoy fpshoel ooeniilbke.t eyu .rhioe As oorTa. o nnl hdvl Tk deieahss sr eeky . deltecspmAceifaoegcotnan-ohmandnh- npn.Oarpaa deliLeqgnupowe uwedentmt mre ehCoysaosnoioreta ddtkiaVunmnrseeenr tg aY lsds pdossB uel ,bM fuye clc vifseutxenah othlbasself d eaoemeemaiPe ns r nBsc pmlser sltduho.Clue aso sacTcads itrashnpo,inimoP etee -avoinsao sMean bsus npdsids ogt.isoMyr t hboo,hsTi dootykpoohane er odrsentcsmg hslei oa erhaeels DnG cnda n Cattuavi eiaehzancbneiaoserndnny vtf u vi aseilogtpoaa gsh,icrnens nlhe luc ruda ft ofssaosssotetn,tcurrr idrs ouapmtaci hpscrontratateioenosu nca r ntrasocttei.ishecfnn, ae gdl
‘Operating Model Canvas’ as a simple and practical way to work I also love the messy look and feel of the book. The charts are
out HOW to deliver the value proposition the best way. dit rnawotne sf raelel hoavenrd t bhye mplaancea,g tehres twhhemolese tlhveinsg, tahpepree aarrse clohtaso otifc pboustt -is Thomas H. Davenport,
Iap Tgt rschreyoetetiune p asag otleli hslgctyiorton eid oneedodnd oeh scasuto odhgfi nvetenahs dsianasa dttttmea hvtngaeheten elbt yt hi.ewasi sgnthtehg ofsa.el etoa ifsot i tbrhhgleeiasl np waiszpa ampyt riatooonna adc gahene.li rdvOse inirtn set hdsiuseif p ftvehparaleliuten eritts aarreea s bfurinll i–a natnlyd c yoohue sciavne. tYooou. can tell that the participants had a lot of wIlafep hbAvrylaseaioeCogpnnrcluu.ehetoda t i ItDn tl ttll iaVyil’hdkaeosicas eent ntcgtld tidiuirecevmeii ernitaOetss,i eri cgn.Pesl aaitgrBwusealeo,n auri firnsp rtgdotwbehod hirO osn as etoamogilphOtdudku ieiaoetsrsn trock rn aPoh lleniye entnDsoeiratgn ,e e vroaHa ga.esa lnn ifA.u Mg’odbodslmen lf u of Bafp,tss, daurha yiesntesrnorCa eiotelcnu sknesCoore’ie s nla-bslm r,Nc mg nssaor B veeplMototsaoaheokedasot es e dtetbwd phlhdti ensiheawca Alwg ionk vnnoCpste inker t a otpkuhix anno.tp n lvg y a s MowptOaohcieibtdnpeorhWoe ea nt culrtmh taPaitiCainAil nntsofnrgai vuonrsdldn aetergmic v ss itsi ma mtcmaoohahisudodanp ieostmnleedmrissderolyi, n ooe r jccvroeyvltno iesenleut, aan UabhsgurtdBc rnyae trleset hevd.hufpre eyeu rsTetsc rshobisontri Gnhefhe ineinb co eeeesucO utnureadsir slp lp elfdhidswcerneat aa srercmf,nm aiosoat vtsltrnsiiiae.wnnn stsngigihan.d regAedy rs
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Mark Smalley, Ambassador,
ASL BiSL Foundation
Andrew Campbell has produced a very useful
book that can be used in its own right or in
combination with the Business Model Canvas.
John Webb, Vice President & I had the pleasure of reviewing the book and
Program Lead Mars Operating learnt a lot in the process. For most people, Stephen Bungay, author of
Model, Mars Incorporated Freek Duppen, Senior Manager, the term operating model is poorly defined The Art of Action
I have just led a review and redesign of the My work and teaching on strategy execution
Joe Spadaford, Chief Operating Model Development, The and loosely used. Operating Model Canvas
global operating model for Mars Incorporated. is about how organizations make things
Operations Strategy Officer, LEGO Group Dr Graham Edwards, retired does a good job in pinning it down in simple
Andrew Campbell was a significant help to happen in line with their intentions. It focuses
Computershare Many people are going to find the insights CEO, AECI but well-grounded language. The guidance
me in this, and I learned a lot from applying on the ‘software’ – how to set direction and
I have led many change and transformation in this book really valuable. Whether you are At AECI we got a lot of use out of the is practical and attractively presented. I used
some of the tools and processes that are in align people so as to create unity of effort.
projects that supported an overall business new to the topic or a seasoned practitioner, Business Model Canvas. Every business or the principles and structure in my work for
this book. I can see that the thinking has But every company has made commitments
strategy. These are always difficult projects the book offers plenty to help you on your proposed new acquisition had to present The Open Group’s IT4IT Forum to create an IT
developed even further since then and this to doing things in a certain way that is
both in the design and the execution. operating model journey: a clear framework its Canvas to the Exco, and managers were operating model and I am pleased with the
book would have been hugely helpful as I reflected and constrained by their ‘hardware’.
Operating Model Canvas is a useful for thinking about operating models, a basket subjected to a fairly rigorous grilling to ensure results. I have no hesitation in recommending
worked through the operating model scope Operating Model Canvas addresses the
and pragmatic aid to this work, full of of tools, and copious examples ranging from they really did understand their business this book.
and critical analyses with the Executive question of how to change that hardware
tools and examples and helpful ways Zara to Snapfish and from a government model. If we had had the Operating Model
Committee. and design an organization with the right
of simplifying complexity. It provides a department to an IT function. There are Canvas, those sessions would have been
I will certainly use this approach next time I operational capabilities. I find the simplicity of
framework to consider the change elements alternative ways to approach the concept of more penetrating on operating issues. This Michel Berthus, Group Vice
have similar work to do. It simplifies what can the canvas, the wealth of examples in Chapter
holistically, giving you the opportunity to operating models, but I can highly recommend book is another important step forward in President - Head of Quality
be a complex and intimidating task, helps to 2 and the quality of the tools explained in
create an implementation plan that will more the approach in this book. It is easy to read, management thinking. Management, ABB
put the work in the right context and provides Chapter 3 both practical and powerful. The
likely be successful. practically relevant, and touches upon all the Operating Model Canvas is both simple and
tools that ensure rigor and focus. authors’ innovative and engaging approach
important aspects. powerful. It provides a simple framework (the
If you have an operating model project to do, turns the hard work involved into fun, and
Canvas) and some powerful tools (value chain
you need this book. redefines what a ‘how to’ textbook should be.
map, organization model, supplier matrix,
It is a great companion to The Art of Action.
etc.). I cannot imagine anyone involved in
working on organization design or operating
models or even process improvement that will
not gain a great deal from this easy to read
and engaging book.
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Marc Lankhorst, Managing
Consultant & Chief Technology Amy Kates, Kates Kesler
Evangelist, BIZZdesign, and Organization Consulting and author
Jeroen De Flander, author developer of the ArchiMate® (with Jay Galbraith) of Designing
of the bestsellers Strategy standard for enterprise Your Organization
Execution Heroes and The architecture modeling As organization designers, we help leaders
Execution Shortcut Our company BiZZdesign does many Graham Dalton, Independent make smart decisions about ‘organization
Operating Model Canvas helps you in a projects that involve designing the business Management Consultant models’. A prerequisite to this work is a clear
practical and fun way to design the best architecture and operating activities of a I have used Andrew’s OD tools over a hundred ‘operating model’. The operating model
possible operating model for your strategy. business or organization. The design of times, both at PwC and as an independent articulates the business framework and how
Highly recommended! business models has been very successfully management consultant. They make sense to the organization components will relate to
addressed by Alex Osterwalder and Ives Kirill Derevenski, Strategic clients and give great insight and clarity. one another. A clear operating model makes Naomi Stanford, Organization
Pigneur in their famous book Business Model Business Architect, ex-Sodexo This new contribution brings similar clarity to selecting among organization options much
Design Practitioner, author,
Professor Gunter Muller- Generation. But to make your business I have carried out a number of jobs the complex topic of operating models. easier.
speaker
Stewens, Institut fur model work, you also need an operating transforming strategy into operational results Andrew’s book is very visual and easy to read; Andrew Campbell brings a designer’s eye Andrew Campbell, more typically known
Betriebswirtschaft, model, describing how the elements of in mid-sized and large companies. I wish I and the great client examples bring the topic to demystifying the steps for creating an for his strategy and organization work, has
Universitat St.Gallen your organization together deliver its value had had Operating Model Canvas by my to life. operating model. This book is filled with tools, focused his attention on the task of turning
Strategies often fail to get implemented. We proposition. The Operating Model Canvas side. It is comprehensive, straightforward This book and its Operating Model Toolbox examples, and a wide variety of case studies. It
strategy into operations. He and co-authors
already have ways to convert strategies into proposed by Andrew Campbell, Mikel and accessible. It is written by people who will be invaluable to consultants and will be an essential guide for anyone working
explain, through illustrations and examples,
scorecards and KPIs, but we have fewer tools Gutierrez and Mark Lancelott extends the understand strategy and who know how executives alike, guiding them in how to on organizations.
the six elements of the Operating Model
to help convert strategies into portfolios of thinking behind the Business Model Canvas to connect strategy with operations to align their organization and operations with
Canvas - value delivery chains, organization,
transformation projects. Operating Model to provide a practical tool for designing such drive measurable results. It contains tools their strategic aims. I was part of a team that
information systems, locations, suppliers
Canvas fills this gap. Andrew Campbell and his operating models. This book will help anybody and methods that are effective and easy to developed PwC’s approach to operating model
and management systems - in a beautifully
co-authors seem to understand both strategy involved in business design, target operating apply while using the language that senior work and I wish I had had this book to help
clear and fun way that takes the pain out
and operations and have created an ideal models, business architecture and operational managers talk. A ‘must have’ to get your me.
of operating model development and
companion to the Business Model Canvas. It is improvements. project right from the start, and to get it
implementation. It’s a substantial contribution
an easy and fun read. And it encourages and to a successful finish. A perfect operational
designed in an engaging way showing the
supports the reader in applying the ideas on ‘nuts and bolts’ companion to Business
working steps as they actually progress and
real projects. Model Generation, when you need concrete
giving helpful tips, guidance and resources
guidance on operating model design.
along the way. A great addition to any
organization designer’s toolkit.
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Contributing authors
Important contributors (alphabetical): Examples provided by: Our course ‘Designing Operating Laura Worboyes, Amlin Investments Yana Meltser Shaer, HSBC
Marcus Alexander, London Business School Dev Mookerjee, Ashridge The authors, and Models’ at Ashridge Executive Jeremy Faint, NHS Vanessa Ryan, Royal Mail
Stephen Baishya, Consultant Gillian Morris, Jaguar Land Rover Marc Baker, Ofqual Education has been a huge learning Paul Hill, Manheim Steve Curry, NHS
Martin Bartram, Royal Bank of Scotland Rupert Morrison, Concentra Andrew Freiman, Department of Work experience for us. Here are some Eric Smith, Calmac Sandra De Sousa, MMI Holdings
Nicola Bateman, School of Business and Economics, Guenter Muller-Stewens, Universitat and Pensions of the participants (about a third - Frances Hall, Corbar Consulting Jan Luyten, DSM
Loughborough University St Gallen Roberto Gil, Velatia random order). Charlotte Eimer, BBC Monitoring Sumit Mistry, Salesforce
Marcia Blenko, Bain & Co Peter Murchland, Enterprise Architect Alex Graham, Egremont Sebastian Pordomingo, Akzo Nobel Stephen Ogundere, Consultant Rachel Honey, John Lewis
Stephen Bungay, Ashridge Strategic Management Centre Mark Palmer, OEE Consulting Adam Laurie, DEV CON Dean Genade, Sanlam Damian Pearson, Ernest and Young Sam Airey, Weightmans
Christoph Burtscher, Yodel Joseph Paris, Opex Society Jamie Lopez, Faes Farma Jonathan McDonnell, British Red Cross Abdulaziz Aladwani, ELM Consulting Mike Lynn-Jones, Lowell Group
Alan Crawley, Optima Partners Anish Patel, Patel Miller Wendell Mitchell, Guardian Group Rob Adsley, Xl Catlin Alan Crawley, Optima Partners Matthew McClelland, The Nursing and
Kirill Derevenski, Strategic Business Architect Anca Raines, PA Consulting Howell Schroeder, Schroeder Forbes Wendell Mitchell, Guardian Group Helen Own, Pasque Consulting Midwifery Council
Joao Dolores, Sonae Richard Rawling, Nous Group Deborah Strazza, John Lewis Andrew Milbourne, Cambridge English Eric Thiam Sebates, Imperial Tobacco Andreas Kroepfli, Swiss Federal Department of
Freek Duppen, Lego Howell Schroeder, Schroeder Forbes Partnership Collette Roche, Manchester Airport Janice Paterson, NIHR Clinical Research Finance
David Favelle, ValueFlowIT Mark Smalley, IT & ASL BiSL Alex Szekely, Wilson Perumal Scott Schoenbrun, SPX Network Nigel Paling, Manheim
Chris Fox, StrategicLearningApp.com Foundation Ricardo de los Rios, IESE Sardip Sandhu , Walgreens Boots Alliance Vikki Harmon, Grant Thornton John Hall, Swagelok Manchester
Allan Gasson, Independent (ex Deloitte) Joseph Spadaford, Computershare David Winders, Lecturer and Business Deborah Strazza, John Lewis Christian Harm, Kion Group Fred Creighton, World Duty Free
Geoff Grace, AXA Jonathan Tidd, OEE Consulting Architect Ian Todd, Independent Police Complaints Mike Fisher, Matthew Clark Jeeti Chauhan, Shell
Alex Graham, Egremont Conrad Thompson, PA Consulting Commission Hester Gudmunsen, ACCA Sam Lewens, myBBC
Ben Gray, Guild Consulting William Ulrich, Business Architecture Phil Merrell, Willis Towers Watson Laura Lee Oliver, Red Apple Consulting Naresh Mongroo, Guardian Shared Services
Ben Groom, Capgemini Guild Carol Madeley, Belron Karen Moore, University of Sydney Devand Singh, Cambridge English
Jonathan Hammond, Knadel John Webb, Mars Tammy Tawdros, Ashridge Paras Sood, SAB Miller Maher AlHaidary, The Capital Market Authority
Steven Han , China David Winders, Lecturer and Business Else Marie-Brekke, DNVGL Kate Bendon, K8B Consulting Ltd Chantal van der Ginste, Delaware Consulting
Amy Kates, Kates Kesler Architect Louise Wade, Project Delivery Excellence Adrian Twyning, British Gas Olutoyin Orefuwa, TransmissionFour
Marc Lankhorst, BiZZdesign Nicolay Worren, Norwegian University Carlos Alpizar, Grupo Cuestamoras Imm Law, Royal Mail Consulting
Carl Lloyd, Royal Bank of Scotland of Life Sciences Hannah Crossley, Egremont Group Fiona Evans, Zoological Society London Mohammed Omar Baqais, ELM
Peter McClure, Vodafone Geoff Grace , AXA Insurance Ben Groom, Capgemini Oliver Landgraf, Consultant
Andrew Blundell , Walgreens Boots Alliance Michael Donaldson, Standard Life Mary Kennedy, Consultant
Martin Bartram, RBS Charlotte Wedd, Manchester Airport Group Kathleen Versland, Deutsche Bank
Alhaidary Maher Monsour, CMA Andy Aitkenhead, Kuoni Travel Mark Bellamy, PA Consulting
Course website: www.ashridge.org.uk/dom
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Contents
1 94 178
CH1 CH3 CH5
Operating Model Canvas Toolbox Creating an operating model
An introduction to operating models, The tools you need to do operating model for a function
business models and the design process work, divided between core tools and A fully worked example of a high-level
additional tools operating model for the IT function of EEI
34 134 198
CH2 CH4 CH6
Operating Model Canvas - Creating a target operating Examples of operating model
Examples model for a business change
How to use the operating model canvas A fully worked example of a high-level Five examples of ‘as is’ and ‘to be’
and a dozen examples, from Uber to Shell target operating model for EEI, a company operating model canvases
to Cardboard Citizens in the business of making equipment for
the electricity industry
... And last but not
least: About the
authors 210
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Chapter
1
Operating Model An operating model is ...
Canvas
CH1 visual CH1
.. a representation (i.e. a model) The journey to success has
four parts:
14
Business model canvas
diagram or map
.. in the form of a
20 ➤ The strategy part: deciding what the
Transformation
or chart or collection of diagrams, organization will do
24 ➤ The operating model part:
Design steps maps, tables and charts
designing the organization so that it is able to
Tips 32 execute the strategy
elements of the ➤ The build or transformation
.. that show the
part: creating the target operations and
organization,
such as activities,
organization
people, decision processes, information ➤ The doing-the-business part:
running the organization so that the strategy is
systems, suppliers, locations, and
How to deliver achieved
assets,
This book is about the operating model part:
great value to your
the design part. It is not about the strategy,
.. that are important for delivering the transformation or doing-the-business parts
customers and value proposition(s)
organization’s
beneficiaries
combine Different Other authorities include a
.. and how these elements
authorities define mission, vision and values step
to successfully deliver the value operating model before strategy. We include
differently. There this as part of strategy.
proposition(s)
is no standard
definition. This is
our definition.
2 OPERATING MODEL CANVAS AN OPERATING MODEL IS ... 3
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