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How to Improve Operational Business Models Part 2

A model is just a plan until someone puts it into action. During the CoS panel, we wanted to get a feel for how businesses were using these models in practice and how that translated to outcomes. Our panelists all agreed that communication is the single most important aspect of success with any operational model. 

In Part 1 of Improving Operational Business Models we discussed what operational business models are and how to create an operational business model for your company. In this article we'll discuss four ways how to improve your model.

Sherrod Davis from EcoMap Technologies, Inc. talked about his company's values-driven operating model. He described how management meets on a quarterly basis to review the different "buckets" of the organization and identify what went well and what didn't. But they don't stop there because communication is a key value in the organization and they want to maintain a two-way flow of information, so they publish narratives detailing their closed-door discussions for the entire company to see. Then, they provide a forum for anyone to ask anonymous questions on anything that was in the published narrative and the leadership team has to respond. It's a really fantastic way of promoting transparency in communication. 

Does your organization currently operate with a defined model? If not, now may be a good time to formally adopt an operational model to improve efficiency. And if you are already using one, do you know how effective it really is?

Here are a few key considerations for ongoing evaluation of your operating model:

  • Continually re-evaluate the effectiveness of your operational model.
  • Dig deep and consider your customers' needs to define the value you are providing. 
  • Even when things are good, brainstorm ways that you can elevate your value-add components.
  • Progress happens one step at a time. Changes to your business model don't have to be big to be effective.

Tips for Improving your Operational Business Models

Our CoS panels always provide unique insight into the practical experience of our panelists. Hearing their stories about what is working well for them and why is a great opportunity to learn. Here's what the leaders we talked to had to say as far as tips, tricks, and best practices.

Communication

Sherrod pointed out in our panel that the most important element of any operational model has a shared language. This could mean venturing away from lingo and intentionally creating a shared language so that all partners, customers, and colleagues can get on the same page.

You might be surprised at how much of a difference simplifying language can make. Coworkers who can communicate without barriers are able to collaborate and innovate. Plus, communication is the thing that bonds us so a shared language is the quickest way to unite a team.

If you're not already doing these things, consider improving your operational communication by:

  • Identify a list of trade jargon or company-specific lingo that may not be well-understood across different demographics.
  • Define shared language terminology during the onboarding process for clients and employees. 
  • Adopt common industry terminology and avoid being unique with your jargon. 
  • Identify common miscommunications and address them in your training and onboarding materials.

Michael reminds us that all of the feedback that we get from staff, customers, and stakeholders should be collected and revisited. As leaders, we need to be open to receiving feedback and using it constructively to improve what isn't working. A customer relationship management solution (CRM) is an essential piece of technology for any business to track and manage its services. But it's not the only communication tool that you should use. Consider adopting a similar platform for internal communications within your teams. In the last two years, as so many companies ventured into the world of remote and hybrid work teams, the possibilities for collaboration tech have really exploded.

Clarity

Michael brought up another common stumbling point for operational success with nuanced models. Sometimes our attempts to deal with complex situations or unknown variables is to rely on ambiguity. We commonly see operating models that lack any real definition and it's unsurprising when they fail because the steps were never fully formed ideas. Michael says that "first and foremost, is your goal framework. The way you communicate progress is actually the most important thing." 

Building Trust

Trust is the foundation of any productive relationship. The efficacy of leaders relies on the ability to build trust within the leadership team and between leadership and the different levels within the organization. Ultimately every employee is working towards a shared goal; leadership is just there to align activities with operational goals and drive productivity towards reaching those goals. Therefore, a break in trust is a fundamental failure within the organization.

Michael says that his organization focuses on vulnerability as one way to build trust. As they work through strategic planning processes, leaders take the time to be direct and honest with each other and there are always opportunities within those vulnerable moments to measure trust. 

Sherrod echoes that same message, stating, "one of the best ways to be vulnerable is just to ask questions and ask questions authentically." Trust is a critical element of effectiveness in the Chief of Staff role; it's essential to build allies and lead authentically.

Learning from Mistakes

It's also important to remember that we can focus on communicating and building trust all day long. But unless we also practice awareness of our mistakes and take time to digest and analyze the situations that contributed to the mistake, we'll always be limited in our efficiency. Stephenie says that you also need to focus on what the follow-through looks like after a mistake is made. "Failure has taught me to guide something through a process, but it also really taught me a lot about how to trust other people."

When to Address Changes that Improve your Operational Business Model?

With all of the talk about change and the rapid pace of change in growing organizations, you might struggle with the frequency for updating your operational business model. Let's be clear–not every change requires you to update your business model. Avoid getting caught in the trap of recreating the same processes over and over. Here are a few key moments when you will want to review your operational model and possibly make changes.

  • Review your operational model when your business strategy pivots to a new customer type or service offering.
  • Take a deep dive into your processes and workflows whenever you are taking on significant outsourcing capabilities.
  • Measure the impact of major technology investments like cloud computing and artificial intelligence modeling against your existing operational model. 
  • Consider how mergers and acquisitions affect your operational business model and update accordingly.
  • Take another look when shifting to or from centralization or decentralization of services.

The Takeaway on Improving Operational Business Models

An effective operational model outlines the people, processes, and technology involved in achieving business goals. The value of the operational model lies in alignment. It begins with a well-formed business strategy that translates to a business model and then further down to an operational model. The operational model is where the Chief of Staff spends a lot of time growing the organization and managing change. 

So, when it comes to improving operating models, the key is in building in native communication with a shared language and useful collaboration technologies. It's in finding clarity in defining goals and procedures and building authentic relationships with all stakeholders. A good operational business model will change as the business grows, but it will always serve to maintain a values-based alignment between the business strategy and the day-to-day activities of the workforce.

Join a community of like-minded leaders and learn more about improving operations. The CoSN group features monthly talks on relevant topics to support your growth in the CoS role. Join today.

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