People, purpose and platforms: how to build a resilient operating model in the digital age

Authored by  Shane Monte, EY Partner, People Advisory Services

The operating model concept has been around in various forms for over half a century. While there’s no universal definition, the last two decades have largely used the term to describe how an organization will deliver value to stakeholders, organize talent and digital capabilities, and enable business strategy.

In brief

• People are at the center of every organization
• Outdated operating models can severely affect an organization’s success
• Organizations need to look at the interplay between technology, people, process and competencies to succeed with a modern operating model 

The operating model concept has been around in various forms for over half a century. While there’s no universal definition, the last two decades have largely used the term to describe how an organization will deliver value to stakeholders, organize talent and digital capabilities, and enable business strategy.

That said, a lot has changed. Ensuring your organization is resilient and sustainable now requires leaders to carefully consider the ways people, purpose and platforms combine to enable the digital-era operating model. These three key elements are critical to making your operating model fit for purpose — not just today, but tomorrow and beyond.

Consider these three tried and tested guiding principles to kickstart that process now:

1. Consider people first. Modern operating models should start with a human-centred design. Cultivating a rich understanding of how people will engage, collaborate and serve your customer is crucial. Equally important is knowing the way people will work — in office, hybrid or remote. Consideration needs to be given to these realities, as they will both inform and enable new alternatives.
2. Build around purpose. Align the way you operate with the reason your organization exists. Creating an “efficient” design when you want to encourage innovation and collaboration may not end well. When it comes to design and desire, there can be no disconnect between the two. Every element of the design and every action deployed must come back to support the visionary purpose and enable the desired culture.  
3. Connect through platforms. Enabling people and operations with digital tools and platforms allows your people to make data-driven insights in real time. It’s imperative to strengthen business resilience through digital capabilities that empower your people to stay informed to enable organizational agility and innovate often. Digital operating models that harness the power of data and platforms will flatten the organization and inform how your people will organize themselves to serve their customers. 

Humans at the centre

Even before the pandemic, organizations’ digital era needs were already impacting their people agenda. Talent shortages and the rise of digital capabilities were beginning to force us to reconsider how we enable people, the importance of culture and the importance of leadership capabilities.

Operating model decisions of the past rarely considered where and how work is done best. They often presumed the human dimension was static and applied Taylorism principles that employees performed best when organized into location and process. In 2022, our EY Reimagined Survey revealed both employers and employees recognize that making provisions for hybrid and flexible work is a necessity. Many businesses have yet to fully embrace this and incorporate the necessary policies and practices into their operating models.

That same research also pants a portrait of evolving employee priorities. Some 47% of employees now say they’re more likely to put family and personal life above work compared to just a few years ago. A further 53% say they’re more likely to prioritize health and wellbeing over professional duties. By the numbers, this is huge.

Outdated operating models that fail to account for these nuances can seriously hamper an organization’s ability to spark innovation, spur solutions, drive growth and bolster resilience. 

Purpose and culture 

We know that organizations that operate beyond the goal of making money outperformed the S&P 500 by a factor of 10 between 1997 and 2011. Translate that into today’s context of an ongoing talent crunch, employee disengagement and the Great Resignation, and it’s fair to say: purpose may now count even more for employees who have reframed their view of work. It’s also true for consumers. More than half say they’ll pay more attention to the social impact of their purchases going forward.

If the way you operate remains connected to your purpose, you’re more likely to resonate with your employees and customers alike. Your operating model must absolutely reflect that to succeed in the digital age, and it must also enable the culture that enables collaboration, connectivity and performance at the highest level. The research is clear: organizations that are purpose driven outperform their peers.

When considering the suitability of your organizational design, ask if the systems, artifacts and structures within enable individual and collective purpose. Do they support the development of leaders and learning collaboration, and enable a purpose-driven culture? Many organizational designs may look good on paper, but do they really enable human connections?

The power of platforms 

We all know the story of entire industries being disrupted by emergent, digital startup capabilities. Those organizations that were unable to respond no longer exist.

To survive, organizations must reconsider operating models in light of the digital enterprise and the power of platforms. In the past, the organization of efforts and technology decisions underpinned and enabled humans to perform their roles in a static environment. Now, technology empowers real-time customer solutions, automation, artificial intelligence and the ability to assess, mobilize and make decisions based on the data collected by platforms. This will fundamentally change how enterprises arrange capabilities, organize people, serve customer needs and allocate finite resources from here on out.

Resilient, digital-era operating models must challenge pre-existing perspectives on technology. What used to be done in slow time by teams of sales, marketing, customer service and production functions can now be done instantaneously. That’s because of the interfaces that can exist between the organization and its ecosystem of vendors and customers.

It’s time to re-examine the interplay between technology, people, process and the competencies that leaders and employees need in a modern operating model.

Digital organizations seamlessly integrate people, purpose and platforms to remain resilient

Traditional operating models rarely unleash the kind of resilience businesses need in the digital age. Designing your future-ready operating models is possible if you’re willing to focus on the intersection of people, purpose and platform now more than ever before.

As part of our EY Humans@Centre series, we will be sharing their perspectives on how you can structure your organization to support your managers and, in turn, your employees.

Watch for the next article in this series:

• Darryl Wright on talent strategy and transition management
• Andrea Wolfson on organizational design