What is a Target Operating Model and do I need one?
Running a business is complex, particularly one that is growing whether this is naturally or through acquisition. A Target Operating Model (often referred to in short form as a TOM) is a tool that helps you keep an eye on where your business is heading, and ensure that your investments are focused not only on short term fixes, but that long term goal.
A TOM therefore paints a picture of what you want your business to look like at a given future point in time – often referred to as the End State. This can be on completion of a transformation programme, a portfolio of investments or very often looking at mid and long term horizons typically 3 and 5 years out respectively.
A TOM not only helps you visualise your end state – a useful tool to ensure there is a common understanding amongst directors, senior managers and employees – but it will help you to identify the changes you need to successfully realise your vision and the impact on your organisation.
What do you put in a TOM and where do I start?
The first place to start is to define your Vision for that end state – a short paragraph written in the present tense that explains what the future holds for the company. It is intended to be memorable and motivational, but importantly measurable and achievable.
It is this Vision that anchors your TOM to your strategy.
The best TOMs are well structured, easy to read documents that set out to answer the following questions about your end state:
- How you interact with your customers
- How you fulfil your services
- What skills you need to deliver your services
- What equipment enable your people to work effectively
- How you know how effective your products and services are
Answering these questions will start to demonstrating how your vision will be realised.
The bottom line
A well-structured Target Operating Model will help you visualise your strategy, ensure you invest in your future, and provide your change programmes with a target to aim at.
Contact Us
Whether you are just getting started or are already on your change journey we will be happy to discuss your particular needs with you and provide you with a tailored proposition. Contact us to schedule a call and learn how we can help.
Simon and Zoe each have over 20 years’ experience working on business transformation programmes for some of the UK's most well-known and established private and public sector companies across a range of industries