Why review enterprise business model prior to embarking on Target Operating Model design

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Real life experience suggests that as many as up to 50% of initiatives and projects, including those conceived in good faith and with best possible intentions, are cancelled along the way or do not meet business expectations once finished. In addition to being a huge financial burden on any business and strain on its scarce resources, these aborted or miscarried projects may become a source of teams’ disengagement and low morale once the office rumour mill gets going. By reviewing the enterprise business model beforehand, Strategic Business Architecture helps to dramatically reduce number of these dead starters as it connects the Target Operating Model  with overall strategic objectives of the business. 

The reasons for project failing are a few but not as many as one might think. The many excuses come down to just three cornerstones – measurement, execution and alignment.

Oftentimes benefits are optimistically overstated or not traced back to original goals. In a surprising number of projects, quantifiable benefits (whether financial or not) are not defined at all, which makes any measurement of success difficult, if not impossible. Other projects fail when executors are not held accountable for delivery, or their sponsors run out of enthusiastic steam that conceived those projects in first place.

Yet many, perhaps most, unsuccessful projects fail because they are not properly aligned to the overarching business strategy. This may be because the drivers of strategy themselves are misaligned or conflict, strategy not sufficiently tied to operations, or needed capabilities not properly understood and measured.

Using Strategic Business Architecture framework will help avoiding the above pitfalls by examining the enterprise business model first, prior to any work on its Target Operating Model. Sometimes, all that is needed is spending a few hours to articulate linkages between corporate Vision, Mission and Values and the business model (i.e. revenue and cost strategies). Sometimes, more time is required to reconnect or redefine these and ensure that the overall business model talks to key stakeholders. The bottom line is, nothing should be taken for granted, however sacred it may seem, but probed and challenged respectfully to ensure that design of the Target Operating Model starts with a set of mutually aligned strategic objectives and shared assumptions, not conflicting views on what or where the company should be in X years from now.

From here, accurate measurement of success becomes much easier as clarity sets on what needs to be achieved to meet company’s strategic objectives. And as for execution – and keeping the steam of enthusiasm up – Strategic Business Architecture interfaces with Change Management for that!

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