Operating model

How a company is organised to deliver its business model: the structure, the decision rights, the processes and the metrics.

Its relevance to analysis is that a strategy that requires a capability the organisation does not have will not happen. A company promising to move from selling products to selling services has to change its sales incentives, its measurement and often its people, and none of that is visible in a strategy slide.

Signs that the operating model has actually changed appear in the numbers: a different cost structure, different segment definitions, and a different mix of employees.

Watch for the plumbing, not the announcement.