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No more relics – it’s time for a cutting-edge operating model

Matthew Phipps Profile picture for user Matthew Phipps October 10, 2022
Moving from a legacy fossil to a next-gen operating model is all fine in theory, but how does it look in the real world? Matthew Phipps of ServiceNow cuts to the practical steps organizations can take.

Dinosaur fossil old relic concept © Jill White - Pixabay
(© Jill White - Pixabay)

By the end of 2019, the UK output rate was 20% weaker than pre-crisis. And according to the Office for National Statistics, we’re approximately 15% less productive than Germany, France and the United States. Considering productivity is intrinsically linked to living standards, finding a solution is a question of national importance.

In my view, the solution lies in shedding traditional operating models that weigh us down – and switching to a more agile system that allows businesses to react quickly to rapidly changing markets.

Why you need the next generation of operating models

Legacy operating models are exactly that – legacies of the past that have little place in an increasingly fast-paced digital world. And it’s automation and hyper-personalization leading the charge to change.

Organizations must now look to value-driven operating models that take siloed teams – from marketing, to IT, product development, and sales – and connect them all on one platform to create a multi-functional (not to mention, multi-faceted) team.

That way, the right employees have access to the right information when they need it most. Not only does this put those employees as close as possible to the customer’s challenges, they have the power to make decisions faster – boosting productivity and increasing customer satisfaction.

Next-gen operating models in action

That’s all fine in theory, but how does it look in the real world?

Look no further than the financial services industry. Legacy banking has been flipped on its head with challenger banks coming in with a digital-first approach. Stripe led the pack in payment services and has come out on top; elsewhere, Monzo reimagined mobile banking from the customer’s point of view. They put customer convenience and agile decision making first and accelerated their productivity as a result.

Another example lies in music streaming giant, Spotify. It designed its development teams within each function v treating each division like a mini start-up for maximum flexibility – with every team tasked to develop and deliver a specific offering to customers.

The results? Spotify releases 20 high-value code on its platform per day. Compare that to the typical three to six month software scrums, and the numbers speak for themselves. By taking a new operating model approach, Spotify’s teams were able to fail fast, try a different tack, and move forward with the agility needed to meet customer expectations.

And we've seen this echoed across many organizations, including our own. We’ve seen unprecedented growth from 6,000 employees to an 18,000-strong workforce in just three years.

One might expect such a large corporation to get further away from what their customers want. But in reality, we're even closer. We don’t work in silos, but in smaller multidisciplinary teams that address specific customer needs without skipping a beat.

Transforming into a next-gen operating model

You might be asking yourself, how can your business radically change to the next generation of operating models? 

Step one — outline your purpose. It sounds simple, but bringing it all back to why you’re doing this, and why your teams should care is the most important thing you can do.

Once your purpose is clear, it’s time to turn to senior leadership. A change of this magnitude must be led by those who see the big picture, not just the small details. Once that approval has been secured, transparency and clarity across teams is paramount. You need complete buy-in across all levels to make this kind of initiative really work. Fundamentally you’re changing your ecosystem mindset, you’re changing the way your people make decisions, based on your purpose, strategies, goals, and data.

And securing that buy-in is simple. You’re essentially drawing an imaginary line that connects your efforts with what’s actually happening for the customer, then visualising and sharing outlining it — in as simple terms as possible — for all involved.

By showcasing what this model does, and exactly how it can improve the customer experience, you’re taking the first step towards making it a reality.

What’s important to remember, however, is that this transformation won’t happen overnight. It’s going to take time to shift mindsets and recreate a new work culture that puts the customer at the heart. And to make sure you truly succeed, normalise the idea that it’s ok to fail fast and move forward quickly.

It’s all about evolution – of your business and your teams. And when you have the right technology and people behind you, staying one step ahead becomes so much easier.

To find out more about the next generation operating model, tune into the latest episode of the ServiceNow TV show.

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