by Anahita Ghosh, Consultant at 4C Associates
In a world defined by constant change, the traditional approach to operating models, which prioritises repeatability and control, is rapidly becoming obsolete. Static, linear structures designed for stability and scale are being outpaced by disruption, innovation, and shifting customer expectations. To thrive, companies must develop a dynamic and evolving operating model that is continuously refined to enhance profitability and drive sustainable growth.
An evolving operating model is not a fixed blueprint. It is a living framework that adapts in real time to support strategic shifts, emerging technologies, and changing market demands. Your operating model should recognise that what works today may be insufficient tomorrow and should have the required flexibility to pivot without compromising on performance. MIT research shows companies with mature operating models outperform others with 31% higher operational efficiency, 33% more customer satisfaction, and 34% faster product development.
But what does it really take to create and sustain an operating model that fuels both long-term profitability and growth?
- Start with designing backwards from your strategic ambitions
Too often, organisations retrofit their operating model around legacy systems. This can be a mistake. They should be designed from the outside in – starting with a clear strategic ambition and working backwards. Whether your focus is market expansion, digital transformation, customer experience, or cost leadership, your operating model should be designed to enable and accelerate these ambitions. The goal is to maximise growth and profitability, and ensure the vision becomes a reality.
Some of the key questions you should ask are:
- What are the top strategic priorities for the next 1–3 years?
- Are the current structures, processes, and capabilities aligned to deliver them?
- Where are the biggest gaps or inefficiencies today?
For instance, if your business strategy prioritises growth via rapid international expansion, your operating model must support scalable governance, localisation of services, and agile decision-making across geographies. If you’re focused on digital innovation, your model must enable fast product iteration and cross-functional collaboration.
Aligning the operating model to measurable strategic outcomes, such as profitability, growth, margin improvement, or speed-to-market, ensures every part of the organisation is working in the same direction.
- Build in flexibility
Traditional models built for repeatability and control struggle to respond to change. They are static and rigid, and often, core business components such as teams, capabilities, process, and technology cannot be reconfigured quickly enough. That’s why modularity should be the design principle at the core of modern operating models.
Think of your organisation as a portfolio of capabilities that can be mixed and matched. This approach has been successfully applied allowing autonomous teams to innovate within clear strategic guidelines.
Consider:
- Using cross-functional teams whose purpose and size can be altered based on project or product needs
- Building interoperable technology platforms that can be scaled or updated independently
- Developing shared service models that offer centralised support without stifling innovation in business units
This kind of design also supports experimentation without disruption and allows your organisation to scale intelligently which is critical when testing new propositions or entering new markets.
- Drive decisions, not just reports
There is a clear divide between organisations that use data to inform decisions and those that use data to validate what they already believe. The former adapts, evolves, and thrives. The latter stagnates.
A truly evolving operating model puts data at the heart of its operating cadence. It means embedding data into decision rights, empowering employees to act on insights, and continuously refining processes based on real-time feedback. The key is to use the detailed insights to validate whether the model remains fit-for-purpose.
Some of the critical enablers can include:
- Clear metrics to track both performance and adaptability (e.g., speed-to-market, customer satisfaction, employee engagement)
- Real-time dashboards to enable proactive interventions
- Feedback loops from employees and customers to refine processes
Leaders must shift from asking “What happened?” to “What do we need to do next?” With the right data infrastructure, businesses can shift from reactive to predictive decision making, consequently boosting agility and resilience.
- Enable people and culture
No amount of strategy, structure, or technology will matter if your people aren’t equipped and empowered to adapt. Culture is the multiplier of your operating model’s effectiveness and creating an environment that values adaptability, collaboration, and innovation is key.
High-performing organisations are increasingly characterised by psychological safety, a test-and-learn mindset, and inclusive leadership. When employees feel confident and comfortable speaking up, challenging assumptions, and experimenting without fear of failure, innovation accelerates. Think about:
- Upskilling employees to build digital literacy, change resilience, and cross-functional capabilities
- Empowering leaders to make faster, decentralised decisions that are coherent with the overall business strategy
- Embedding agile ways of working and an experimentation mindset
Building adaptive capabilities also means investing in skills that future-proof the business. That could mean digital fluency, critical thinking, systems thinking leading to greater cross-functional collaboration. Operating models must accurately reflect and reinforce these behaviours through performance management, career development, and everyday ways of working.
- Governance that enables, not controls
Too often, governance is seen as a brake pedal rather than a steering wheel. In an evolving operating model, governance must shift from rigid oversight to dynamic enablement. This includes:
- Clear accountabilities – roles and decisions rights must be transparent, especially in matrixed or decentralised models
- Regular review cycles – agile governance forums that assess the model’s fitness and make real-time adjustments
- Empowered teams – autonomy should be the default, not the exception; frontline teams should be able to make decisions without navigating excessive bureaucracy
One of the key challenges is ensuring there is clear accountability for change. It’s about placing control where is adds the most value to close out the action as efficiently as possible.
- Make change the norm
Perhaps the most important principle is this: your operating model should be in a state of continuous evolution. It means building feedback loops, learning cycles, and structural flexibility into the DNA of the organisation. You could:
- Consider creating an internal transformation office or an ‘evolution team’ responsible for monitoring market shifts, tracking internal performance, and proposing adaptive changes
- Use quarterly business reviews to reflect on whether the model itself remains fit-for-purpose
- Introduce scenario planning, future-back thinking, and capability roadmaps
It is important however, to be aware of the several hurdles you may face along the way:
- Treating it as a one-off redesign – the model should be continuously refined and improved
- Focusing solely on cost-cutting – efficiency must be balanced with growth and innovation to maximise value add and profitability
- Neglecting culture and change management – even the best-designed models will fail without adoption
- Underinvesting in digital enablers – technology is essential for flexibility, insight, and scale, and proves to be one of the key enablers
Businesses that invest in adaptive design consistently outperform those that don’t. They are quicker to seize new markets, more resilient in economic downturns, and better at attracting and retaining top talent.
It’s not about chasing trends or rebuilding from scratch every few years. It’s about designing your organisation to be adaptive by default. One that aligns closely with strategy, leverages data, empowers people, and embraces iterative improvement.
