Operating Model Redesign: What the Process Involves and What Leaders Should Expect

Ask five leaders in the same organisation how work really gets done and you will often hear five different answers. One describes the structure on paper. Another describes the informal routes people use to get around it. A third describes what the strategy says should happen. That gap between design and reality is usually what starts a conversation about operating model redesign.

The questions leaders bring to that conversation tend to be practical. What does the process involve, how long will it take, and what will be asked of me? Most published guidance answers the first with a diagram of components and says far less about the experience of going through it, which is where leaders are often caught off guard.

This blog covers both. It sets out the stages of the process and describes what leaders should realistically expect at each point. It also treats redesign as something more lasting than a one-off project. McKinsey's global survey of 2,000 executives concluded that organisations should build redesign readiness as a capability, not only a reaction to events. That sits naturally within wider organisational design work, because an operating model only performs when the structure, decisions and ways of working inside it point in the same direction.

What Does an Operating Model Redesign Involve?

An operating model redesign is a deliberate rethink of how an organisation turns strategy into everyday work. It covers what work gets done, where and by whom, how decisions are made, and which processes, technology and governance support it. Structure is one part of that picture, not the whole of it.

Deloitte describes the operating model as the integrated system that translates strategic intent into how work actually gets done. That framing explains why redesign is often a broader task than redrawing the organisation chart. It spans capabilities, processes, technology, governance, talent and culture alongside structure. Increasingly, the question of who does the work includes technology as well as people, which adds a layer earlier redesigns did not have to consider.

Bridgespan makes a similar point in its tips for revising an operating model, noting that structure matters but rarely delivers results on its own. This is the practical difference between a restructure and a redesign. A restructure moves boxes around. A redesign asks what each box is for, what it needs from the others, and who decides when they disagree.

What Are the Stages of the Process?

The process usually moves through five stages: diagnosing the current state, agreeing the design principles, designing and testing options, detailing the chosen model, and transitioning into it. Deloitte describes the same journey in three broader phases, which it calls mobilise, design and implement, and the two views fit together comfortably.

Diagnose the current state. This stage builds an honest picture of how work flows today, which is rarely the same as the documented version. It draws on interviews, performance data and a close look at where decisions slow down, where work is duplicated and where accountability is unclear. The diagnosis also sets the baseline that later results will be compared against.

Agree the strategic anchor and design principles. A redesign needs a clear strategy to design for. Bridgespan advises leaders to start with strategic clarity and then define design parameters, which act as the criteria for judging options. Examples include speed of decision-making, consistency across markets or closeness to the customer. Agreeing these before any structure is drawn keeps the later debate focused on principles, not personalities.

Design and test options. Good design work produces two or three credible options rather than a single answer. Each is tested against the design principles and against realistic scenarios, such as growth into a new market or a change in demand. The trade-offs are made explicit, for example the balance between central control and local speed.

Detail the chosen model. Once a direction is chosen, the work becomes specific. Roles, decision rights, governance forums, process interfaces and capability needs are defined, along with the number of people each part of the model requires.

Transition and embed. This is the longest stage and the one most likely to be underestimated. Deloitte argues that most transformations falter in execution rather than design, and describes the resulting loss of value as yield loss. Transition involves sequencing the changes, equipping managers, adjusting incentives and tracking whether the new model changes behaviour. Embedding takes sustained attention long after the launch announcement.

How Long Does a Redesign Take?

There is no standard duration, because scope sets the timeline. Redesigning one business unit is a different undertaking from redesigning an enterprise with several regions and shared services. As a general pattern, design work takes months rather than weeks, and embedding the new model takes longer than designing it.

Four factors tend to shape the timeline. The first is scope, meaning how many functions, locations and processes are in play. The second is the clarity of the strategy, since a redesign built on an unsettled strategy tends to be revisited. The third is leadership alignment, because unresolved disagreement at the top slows every later decision. The fourth is the organisation's capacity for change, including how many other initiatives are competing for the same people's attention.

Compressing the diagnosis is a common temptation. It rarely saves time. Teams that skip it usually spend the days they saved on rework once the design meets reality.

What Should Leaders Expect Along the Way?

Leaders should expect an operating model redesign to feel more uncomfortable than the diagrams suggest. The work touches authority, status and routines, so it raises questions that organisations have often avoided for years. That discomfort is a normal part of the process and not evidence that something has gone wrong.

Disagreement inside the leadership team. Operating model choices distribute power, budget and accountability, so they surface differences that were previously polite. The first serious disagreement usually appears during option design. It is better to have it there than after launch.

A dip before the improvement. During transition, people are working in a new model before they fully understand it. Decisions can slow and handovers can wobble for a period. Planning for this, and saying so openly, prevents it from being read as failure.

Questions about roles and status. Employees want to know what changes for them and when. Without clear answers, they fill the gap with their own, which are usually worse. Early and regular communication, including honest statements about what has not yet been decided, matters more than polished messaging.

Resistance that is mostly uncertainty. What looks like resistance to the design is often a response to not knowing what the design means for an individual. Addressing that directly tends to work better than persuasion.

What Is Expected of Leaders During the Process?

The leadership team owns the redesign, and advisers and project teams support it. Owning it means making the trade-off decisions, sponsoring the change visibly and adjusting their own behaviour once the new model is live. Handing the whole effort to a project team is a common reason redesigns lose momentum.

The McKinsey research points the same way. It identifies top team alignment, leadership incentives, investment in upskilling people managers and the talent of the redesign team as factors that have grown in importance. Each of these depends on leaders rather than on the design itself.

In practice this comes down to a few habits. Leaders agree their positions as a team before communicating them. They let decisions sit with the people who now own them, even when they would have chosen differently. They make time for people managers, who translate the new model into daily work for everyone else. And they treat their own behaviour as part of the design, because people take cues from what leaders do more than from what the documents say.

Why Do Some Redesigns Fall Short?

Redesigns usually fall short for a handful of recurring reasons, most of them in execution rather than in the design itself. The model on paper is sound, but the organisation around it carries on as before.

Treating it as an organisation chart exercise. An operating model redesign that stops at new boxes and reporting lines leaves processes, decision rights and incentives untouched, so behaviour stays the same.

Skipping the diagnosis. Without a clear baseline, the redesign solves the problem leaders assume exists, not the one that does.

Designing without a plan to implement. A strong design with no sequencing, ownership or tracking tends to stall in the gap Deloitte calls yield loss.

Leaving incentives unchanged. If people are still rewarded for the old behaviours, the new model competes with their own interests and loses.

Declaring it finished at launch. Strategy, markets and technology keep moving. An operating model needs periodic review, which is consistent with McKinsey's view of redesign as an ongoing capability.

How Do You Know the Redesign Is Working?

A redesign is working when decisions move faster, accountability is clearer and the strategy shows up in daily work. These signs usually appear gradually and tend to precede movement in financial results.

Useful indicators include the time decisions take from question to answer, the number of issues escalated unnecessarily, the volume of duplicated work, and how clearly people say they understand their role and authority. Delivery of the strategic priorities the redesign was meant to support is a direct test. Each of these can be compared with the baseline set during diagnosis, which is why that stage matters.

It is also worth checking in at intervals, such as six and twelve months after go-live, with a short and honest conversation with teams about where the model is helping and where it is creating friction. The answers usually point to a small number of adjustments, not a second redesign.

An operating model is never really finished. It is a set of choices about how the organisation works, and those choices need to keep pace with the strategy they serve. The organisations that handle operating model redesign well tend to treat it as a discipline they return to, not a project they complete. What leaders can do at the start is simpler: be honest about what the process involves, and about what it will ask of them.