Operating Model

An Operating Model describes how an organisation is configured to deliver value and act coherently.

It connects the practical elements of organisational work:

• capabilities
• value streams
• processes
• roles
• decision rights
• information and data
• systems and technology
• governance
• measures
• cost
• partners
• learning routines

An operating model is more than just an organisation chart, process map, system diagram, or transformation slide. It represents the active setup through which purpose and strategy translate into action. In the Adaptive Capacity framework, the operating model resides between Business Architecture and Gemba. Business Architecture defines the shared understanding of the enterprise—what the organization needs to do, how value flows, which information is critical, and how the parts connect. The Operating Model demonstrates how these components are practically arranged. Gemba then tests whether this setup functions effectively in the actual work environment.

It is the working configuration through which purpose and strategy become action. In the Adaptive Capacity framework, the operating model sits between Business Architecture and Gemba.

Business Architecture provides the shared knowledge of the enterprise: what the organisation must be able to do, how value flows, what information matters, and how the parts relate. The Operating Model shows how those elements are configured in practice. Gemba tests whether that configuration works where the work actually happens.

A Current Operating Model (COM) describes how the organisation works now. This includes the official design and the lived reality: workarounds, informal networks, unclear accountabilities, duplicated effort, decision delays, data confusion, and hidden dependencies.

A Target Operating Model (TOM) describes possible future configurations. In this framework, a TOM should not be treated as a fixed destination. It is a hypothesis about how the organisation might work better under particular assumptions.

There may be several TOM options.

Each option should be tested through scenario planning, design thinking, dialogue, Gemba observation, and organisational awareness.

The critical question is not:

What is the target operating model?

It is:

Which operating model option best supports purpose, capability, trust, learning, accountability, and adaptive capacity under the conditions we may face?

Related concepts

• Business Architecture
• Business Capability Model
• Value Stream
• Business Process Management
• Common Data Model
• Activity Based Costing
• Enterprise Architecture
• Gemba
• Hansei
• Scenario Planning
• Organisational Awareness
• Knowledge Operating System
• Line of Sight
• Adaptive Capacity
• Consequential Intervention

Explore further

This article connects to the broader framework:

• Ethical Domain — how constraints shape decisions
• Sensemaking Domain — how organisations interpret reality
• Relational Domain — how trust and coordination emerge
• Learning Domain — how knowledge is created and tested
• Action Domain — how intent becomes capability

To understand more on Purpose detailed Subject Areas, visit the Deep Dive section.