The risk in transformation is rarely whether the strategy is right. It is whether the design will survive implementation.
Most organisations invest considerable effort in strategy. The analysis is thorough, the logic is sound, the ambition is clear. Yet a significant proportion of transformation programmes fail to deliver their intended value, and the cause is rarely strategic. It is operational. Somewhere between the strategy that was agreed and the operating reality that followed, something was lost in translation.
That translation layer is the operating model. It sits between strategy and execution, determining how the organisation is configured to deliver what the strategy requires. When it works, execution feels purposeful and coherent. When it does not, the organisation experiences a familiar set of symptoms: initiatives that overlap or contradict, investment decisions that are hard to prioritise, and a persistent gap between what was planned and what actually happened.
Why the gap persists
There are three common reasons this gap endures. The first is that strategy and operating model design are treated as separate exercises, often conducted by different teams at different times. The strategy is set by the board or executive team. The operating model work is delegated to a programme or a consulting engagement that begins weeks or months later. By the time the operating model work starts, the strategic assumptions have already hardened into plans, budgets, and expectations, leaving limited room for the operating model to challenge or reshape them.
The second reason is that the link between strategy and operating model is assumed rather than designed. Senior leaders often treat the operating model as the ‘how’ to the strategy’s ‘what,’ as though the connection is obvious and automatic. It is not. A strategy that prioritises customer experience, for example, has very different operating model implications depending on whether the route to delivery is through digital channels, physical presence, third-party partnerships, or some combination. Those choices need to be made explicitly, and they are operating model choices, not strategic ones.
The third reason is that the operating model itself is poorly defined. For many organisations, ‘operating model’ means the organisation chart plus some process documentation. This is far too narrow. An operating model encompasses governance, decision rights, capability architecture, technology, data, sourcing, financial structure, and the way performance is measured and managed. When the definition is narrow, the design is narrow, and the gaps become apparent only when execution begins.
The strategy-business model-operating model chain
A useful way to think about this is as a chain of three linked elements. Strategy defines the competitive intent, where the organisation will play and how it intends to win. The business model defines how value is created, captured, and sustained, the economics and logic of the enterprise. The operating model defines how the organisation is configured to deliver that business model, the structural choices that determine whether intent becomes reality.
Each link in the chain has distinct design choices. Strategy choices are about markets, customers, and competitive positioning. Business model choices are about revenue streams, cost structures, and value propositions. Operating model choices are about capabilities, governance, technology, and operational design. The three must be aligned, and the alignment should be deliberate rather than assumed.
When the chain breaks, the symptoms are predictable. Strategic ambition without operating model alignment produces aspirational plans that cannot be executed. Business model innovation without operating model adaptation creates commercial promises that the organisation cannot fulfil. Operating model optimisation without strategic grounding produces efficiency gains that do not serve the competitive intent.
Designing the translation layer
Closing the gap requires treating the operating model as a design discipline, not a downstream consequence of strategic decisions. This means engaging operating model thinking early in the strategy process, not after it has concluded. It means asking difficult questions about whether the current operating model can support the intended strategy, and what would need to change if it cannot.
In practice, this involves three things. First, identifying the capabilities that the strategy depends on and assessing whether the organisation can deliver them at the required level of maturity. Second, testing key design assumptions against operational constraints before committing to implementation. Third, creating genuine alignment between the executive team on what the operating model needs to look like, not just what the strategy says.
The organisations that close this gap effectively share a common characteristic. They treat the operating model as a deliberate design choice rather than an inherited reality. They invest in understanding it, they review it periodically, and they are willing to change it when the strategy demands it. The ones that do not tend to experience the same cycle: strong strategy, weak execution, and a persistent sense that value is being left on the table.