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Operating-model change

An operating-model change alters how an organisation is arranged to do its work: which units exist, who reports where, which decisions sit where, and how work flows between them. It moves decision rights and dependencies far more than it moves people, and the moved decisions are what determines whether it works.

A restructure changes the chart in a weekend and the decision routes over several quarters.

Why it matters when the plan changes

Operating-model change is the event most likely to create unowned decisions, because it moves the boundaries that decisions sat on. Every interface it creates is a new commitment between units, and cross-unit commitments are the least reliable part of any plan. Donald Sull, Rebecca Homkes and Charles Sull found, in Harvard Business Review (2015), that only 9% of managers say they can rely on colleagues in other functions and units all the time. Brooks's law explains why the risk compounds: communication channels multiply faster than the parties added. The structure is announced on a date; the interfaces are settled long afterwards.

The tension is that the benefits are structural and immediate on paper while the costs are behavioural and spread out. Duplicate roles are removed at once; the relationships and informal knowledge that made the old structure work leave with them, and what replaces them takes a year to form. The business case usually prices only the first half.

In practice

A regional structure is replaced by product lines over one weekend. Reporting lines change cleanly. Eleven decisions that regional heads used to make now sit between a product owner and a market lead, with no rule for either. The organisation spends a quarter discovering which of those eleven matter and who should hold them.

Evidence

What it cannot tell you

An operating-model change specifies new decision rights and dependencies, not how quickly people will act on them or whether the informal relationships that carried unstructured work will re-form. It cannot show whether a reporting line has taken hold in practice, and it is silent on the length or difficulty of the period during which decisions go unmade.

Questions

Nominally the structure changes; substantively the decision rights and dependencies do. Brooks's law, from Frederick P. Brooks's 1975 The Mythical Man-Month, explains why: communication paths multiply faster than the people added, so each new interface the model creates costs more than the last. The chart is the visible part.

Because the benefits are counted structurally and the costs are behavioural. Donald Sull, Rebecca Homkes and Charles Sull found in Harvard Business Review (2015) that only 9% of managers say they can rely on colleagues in other functions and units all the time, which is exactly the reliance a new structure asks for on day one.

Who holds each decision the plan depends on, especially the ones the new structure makes possible for the first time, and how the interfaces it creates will be sequenced. Those are appointments before the change and removals afterwards, which is the whole difference.

Until the decisions it requires are being made by the people it assigned them to, which is observable and is a later milestone than the structure going live. Programmes are usually declared complete at the earlier date, which is why the settling period is unmanaged.

Not necessarily. A small structural change that cuts across a critical dependency can cost more than a large one that does not. What matters is which interfaces the current plan runs through and whether the change lands on them, rather than the staff number affected.