Lesson 2 — Operating Model Foundations
Operating model ≠ org chart
This is the chapter's first major discrimination.
An operating model defines: - roles and responsibilities; - who participates; - who decides; - who is accountable; - how functions collaborate; - how issues are escalated and resolved.
An org chart depicts formal positions and reporting relationships.
The operating model is the logic underneath the boxes. An org chart can look clean while leaving every important decision ambiguous.
Memory hook
Relationships before rectangles.
What an operating model gives the organization
A useful model creates: - accountability; - communication paths; - collaboration expectations; - decision mechanisms; - issue-resolution paths.
The model must fit the enterprise's culture and structure. Chapter 16 does not say every organization should migrate to the same end state.
The central design tension
Every model balances two needs:
Local autonomy and business-process knowledge ↔ Enterprise consistency and clear accountability
More local autonomy can improve fit with business-unit needs but make consistency and ownership harder. More central control can clarify authority and simplify decisions but create distance from local business knowledge.
The correct answer therefore depends on the facts in the scenario, not on a belief that centralized is always more mature or better.
The five model names
- Decentralized
- Network
- Centralized
- Hybrid
- Federated
The next lesson gives the deciding clue for each.
Source anchor: Chapter 16, pp. 523–528.