Most operating model work starts in the wrong place. The typical approach, restructure the organisation, map the processes, select the technology, feels logical and productive. It creates visible activity and tangible outputs. It also tends to produce designs that look compelling on paper and unravel on contact with reality.
The reason is straightforward. When design begins with structure or process, it inherits the assumptions and limitations of whatever exists today. The organisation chart gets rearranged rather than rethought. Processes are optimised within existing boundaries rather than redesigned around what the business actually needs to deliver. Technology gets layered on top of operating patterns that may no longer be fit for purpose.
The alternative is to begin with capabilities. A capability, in this context, is something the organisation needs to be able to do in order to create and protect value. Not a department, not a process, not a system, but a defined ability. Pricing. Risk assessment. Customer onboarding. Supply chain orchestration. Each is distinct, each can be assessed for maturity and importance, and each provides a stable foundation for design choices that might otherwise be driven by convenience or habit.
This is what I call capability-led design, and it is the foundation of the Value Operating System.
What the VOS is, and is not
The Value Operating System is a framework for designing and assessing how organisations operate. It covers ten domains, from strategy and value creation through to governance, technology, people, and financial architecture. Within those domains sit approximately thirty categories that collectively describe what a well-functioning operating model needs to address.
It is not a prescriptive methodology. It does not tell an organisation what its operating model should look like. Different businesses, sectors, and ownership structures will make different choices. What the VOS provides is a structured way to ensure that those choices are deliberate, connected, and grounded in what the organisation actually needs to do, not in what it has always done.
The distinction matters because most operating model problems are not problems of intent. Senior leaders generally know what they want the business to achieve. The gap sits between that intent and the operational mechanics that are supposed to deliver it. Strategy articulates the ambition. The operating model determines whether the organisation is configured to realise it. When that translation layer is weak or absent, value leaks, sometimes visibly in cost overruns, sometimes invisibly in unrealised potential.
Why the starting point matters
I deliberately focus on the small number of structural choices that drive disproportionate impact, rather than defaulting to organisation charts, exhaustive process mapping, or technology-first solutions. These are outcomes of good design, not the starting point.
Consider how most transformation programmes begin. A new strategy is agreed. A consulting team is engaged. Within weeks, there are workstreams on organisational design, process reengineering, and technology selection, often running in parallel with limited connection to each other. Each workstream produces credible output. The problem is that nobody designed the system.
Capability-led design changes the sequence. Instead of asking ‘how should we reorganise?’, it asks ‘what do we need to be able to do, and how good do we need to be at it?’ That question cuts across the traditional workstreams. It forces a conversation about priorities before resources are committed. And it creates a common language between the CEO who set the strategy, the COO who must operationalise it, and the CIO who must enable it with technology.
In practice, this means running a capability assessment early, typically before any design work begins. The assessment is not exhaustive. It identifies the fifteen to twenty capabilities that matter most, assesses current maturity against required maturity, and highlights where the gaps are widest. Those gaps become the design priorities. Everything else, structure, process, technology, sourcing, follows from that.
What this series covers
This is the first in a series of articles exploring how the VOS works in practice. Subsequent pieces will examine specific themes: how decision rights connect governance to execution, why the capability-technology-data sequence matters, where value leakage typically occurs, and how to apply this thinking in PE-backed businesses, M&A contexts, and sector-specific situations.
The aim is practical rather than theoretical. Operating model design is not an academic exercise. It succeeds or fails based on whether the design is robust enough to survive implementation, and whether the organisation has the clarity and confidence to execute it. That is the standard against which this work should be judged.