Importance of Consumer Organisation in Operating Models

Consumer needs are constantly evolving, posing a significant challenge for global consumer product companies. To stay ahead, organizations must continually transform their operating models to meet these changing demands.

The pandemic accelerated this need for agility and resilience in business operations. Companies that quickly adapted their operating models succeeded in retaining and attracting consumers. Lessons from 2020 emphasize the importance of being proactive and decisive in times of crisis.

Why does an uncertain crisis serve as an opportunity to develop operating models?

Businesses must bring collaborative business models, techniques, strategies, and fast propositions to stay relevant in the market. Each consumer has a different need, and you cannot build a new operating model whenever a new need arises.

We at GrowthJockey believe that time and cost are the two barriers that will come along the way. If you are thinking of creating more responsive, agile, and resilient methods that enable you to pivot overnight, that could do wonders for your organization because many others do!

According to a new report from EY commissioned by MIT SMR Connections, many organizations are suffering to create that kind of operating model for themselves.

Based on the interviews conducted with CEOs and industry experts and the global C-Suite survey, the study explores the challenges organizations face every time they transform into a new consumer model due to customers' changing needs.

But some leading companies use this moment as a chance to revise and reset their operating models for the upcoming future that goes according to customers' needs.

Four types of Operating Models: You need to know!

1. Coordination operating model

This model requires high levels of integration but low standardization. This means that numerous important business components relate to one another. However, each team or business unit operates uniquely.

2. Unification operating model

In this model, an organization's many business units carry out the same kind of operations while catering to the same set of customers.

3. Diversification operating model

Essentially, this approach helps organizations diversify their services to various clients to prevent a central hub that would restrict authority over several business units.

4. Replication operating model

This type of operating model ensures the autonomy of various business divisions. Replication models let consumer companies' units operate independently but in a highly standardized way.

Winning operating models works on five elements

A winning operational model is based on six elements that translate strategies into operational capabilities. Bold decisions determine the success of the business. And these elements can help in better decision-making.

1. Superstructure

A clean sheet or superstructure includes shared entities reflecting the appropriate role of the centre and its operational footprint.

To unlock speed, simplicity, and growth, the clean sheet is based on the structure to create empowered business segments, fewer in number and at scale.

A design for an organizational superstructure involves thoroughly examining the corporate spans and layers. It also includes identifying places for consolidation across brands, banners, or geographic regions and streamlining "shadow" operations like technology, insights, and analytics.

2. Reallocation of talent and resources

Once the corporate centre superstructure the design, they strategically reallocate resources to construct the teams that keep up to the top. The cost and size of each function are allocated by strategic prioritization.

They create guidelines for where and how to make judgments to make the operational model function. They move forward with general management and functional talent to achieve brand goals.

In general, talent in the workplace can refer to innate or learned skills, but it can also be used to identify high-performing and high-potential people.

3. Governance forums and management cadence

The organization implement the governance forums that enable priority cross-group processes. It interfaces to support strategic and operational decisions.

The Management cadence assesses the sustainability of their cost frameworks given the current business outlook and evaluates the maturity of critical abilities like automation and agile ways of working.

Next, leaders and stakeholders agree on the organization's critical capabilities to deliver on its planned priorities and how to build those abilities.

The organization then sets bold aspirations representing a step change in performance, as more than typical, incremental ambitions will be needed to deliver results in the next normal.

Once these steps are taken, the new organization and operating model are designed and implemented. Organizations need to evolve across the enterprise as they work through these changes, cultures, mindsets, and behaviours.

To sustain the new operating model, rigorous implementation of change-management practices is a must.

4. Behavioural expectations

Models are created by the organization using the structure's behavioural expectations. An established company must create a work environment where employees feel valued and appreciated.

Expectations for behaviour define how people should interact. It acknowledges the company's unique cultural heritage by establishing what needs to change to make the team work more successfully in the future.

They shift away from a common decision style to speed up decisions and encourage greater accountability. It aligns with the top team and the broader organization around clear strategic objectives and priorities.

5. Flexible Workforce

A flexible workforce is as important as a physical workforce. After the pandemic, the importance of remote work is visible. Experimenting with flexible workforce solutions has significantly risen in response to the COVID-19 crisis.

Employees can work when and where they are most productive with a flexible work schedule. It can be working late into the night from home, while others may want to work remotely full-time from a different location.

By allowing so, companies can see an increase in business productivity. Many retailers have started to accept large in-house creative employees.

Importance of Consumer Organisation in Operating Models

Consumer organization plays a pivotal role in developing the business operational model. Each organization's strategy and operating models are unique.

To adapt to the stable economic environment, customer organization in business models can help operations perform better with ease. This allows an organization to run, so when it comes to building an effective strategy, the elements mentioned above serve as a foundation for the execution of successful operating models in the business.

Conclusion

The Covid-19 pandemic possessed staggering humanitarian challenges. As the crisis worsens, businesses must take several steps to safeguard their personnel, clients, supply chains, and bottom lines.

After deep analysis, it is clear that companies must make significant and bolder changes in the constantly changing consumer market. Companies need to think beyond reconstructing their organization to achieve more.

Unprecedented situations are obscure. So, to prepare for a better tomorrow, companies need to start working on a better today. Leading companies emerged as the strongest following the Covid 19 crisis.

Organizational leaders must act now to get ready for the next normal. And there is more to go! Therefore, we at GrowthJockey are here for you. Our unique customized solutions help businesses grab opportunities and target them with the proper execution framework and operations model.

At GrowthJockey, we are fully committed to developing customised operating models that effectively address the critical challenges faced by our clients across various industries. Irrespective of your company's size, whether it's a small-scale enterprise or a large corporation, you can now benefit from our tailored solutions.

Get in touch with us today to scale your business by attaining perfection in your operating model !