Written by Pete Smyth, CEO at Leading Resolutions
An effective business strategy is only as good as its execution. Bridging the gap between an ambitious vision and the day-to-day reality of operations needs the right Target Operating Model (TOM). However, building this strategy shouldn’t just be a box-ticking exercise for the C-Suite boardroom; a successful TOM is the living blueprint of your organisation, dictating how people, processes and technology infrastructure interact to deliver maximum value.
While the need for a resilient, forward-looking TOM has never been more urgent, CIOs must comprehensively assess their existing model or risk costly operational setbacks. An inefficient TOM doesn’t just slow your business; it actively hinders growth and leaves you vulnerable to quickly being surpassed by competition.
Here are three key signs that indicate your TOM is no longer working for you.
- You haven’t changed your model since the last major change in your business.
The most obvious red flag is also the most common: your TOM has remained static while your business has evolved. For SMBs, strategic flexibility is essential to staying responsive and competitive. Without a clear, adaptive TOM in place, businesses risk falling behind or becoming obsolete altogether. Resource allocation, whether financial, technological or human, isn’t a one-time exercise. It requires ongoing evaluation, adjustment, and improvement, ideally with expert guidance from a technology consultant who can align implementation with your broader strategic goals.
CIOs will already recognise the usual signals of a strategic shift, whether it’s a major acquisition or divestment, the launch of a new product, or the arrival of new senior leadership. Shifting market conditions can also trigger the need to adapt quickly and seize emerging opportunities. However, beyond these headline changes, there are often quieter forces at play: Are you battling persistent inefficiencies that drain resources? Is your organisation struggling to scale effectively? Are you facing critical skills and talent gaps that impede progress?
These are not just operational headaches; they are clear indicators that your underlying operating model can no longer support your business’s needs. If your TOM was designed before your last significant pivot, it is almost certainly misaligned with your current strategic goals, needing urgent reassessment to get back on track.
- Your TOM is just like every other TOM
Many businesses fall into the trap of adopting generic, off-the-shelf operating models in the quest for efficiency. While these templates can seem like a convenient shortcut, they rarely offer the nuance or practical direction required to deliver meaningful, sustainable results. A TOM simply cannot be built using a cookie-cutter approach; your organisation’s DNA is unique, and your operational blueprint must reflect that.
Creating a TOM that delivers real impact requires a thoughtful, bespoke structure that aligns with your core business strategy, drives operational efficiency, and supports long-term scalability. To create an impactful mechanism, businesses must first define the vision and strategic objectives; assess the existing model; design the future-state model with key progress indicators; develop a practical roadmap for implementation, and then execute, monitor and continuously optimise.
Very simply, if this is the first time you are in fact assessing your TOM, by default, it’s already not performing well. A generic model ignores your unique culture, competitive differentiators, and specific market position, rendering it ineffective from the start.
- Your TOM was designed in an echo chamber
Business leaders are rightly confident in their ability to lead change from within. They possess an unparalleled depth of knowledge about their organisation’s internal dynamics and planned trajectory. However, this very proximity to the day-to-day can make it incredibly difficult to see the full picture. When you are deep in the weeds, gaining a truly objective, enterprise-wide view and making decisions with market-level awareness becomes a monumental challenge.
Internal teams can be susceptible to political influences, protective of legacy systems, or simply have blind spots they are unaware of. This is not a failure of talent, but a natural consequence of being embedded in the system. Crafting a truly effective TOM requires an element of empathy-driven strategy. This means understanding your business from the inside out, as well as seeing objectively, as your customers and competitors do.
By combining internal knowledge with external objectivity, you can craft a TOM that reflects your unique challenges and ambitions. The result is a clear, tailored transformation journey that highlights what needs to change and where that change will generate the most significant value.
The right TOM underpins a successful business strategy
When your TOM isn’t working, everything else within the business follows suit. The right TOM serves as both compass and engine, guiding growth while enabling businesses to pivot at speed, scale intelligently, and seize opportunity in real-time. SMBs need a model that flexibly aligns operational capabilities with strategic intent, which can anticipate the intersection of emerging technologies alongside shifting customer and market demands. Without it, they risk not just stagnation but outright failure.
