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Agile Business Models

The resilient operating model

May 20, 2021

RESEARCH REPORT

In brief

  • The pandemic has fundamentally altered customer behavior and re-shaped markets.
  • Organizational agility and resiliency are increasingly critical to helping companies deal with these changes.
  • 74% of C-suite executives feel they need to completely rethink their operating models to be more resilient.
  • 93% say their organization’s existence is jeopardized by operating models that can’t keep pace.

The fallout from the COVID-19 pandemic has changed consumer behavior and fundamentally restructured the global economy. To survive, companies need to adapt. Fast.

One lesson is clear: Those armed with operating models that enable them to continuously adapt are more likely to prosper. However, 74% of C-suite executives feel they will need to completely rethink their operating models to be more resilient as a result of COVID-19. Organizations that fail to act now risk getting buried by the competition long before the next crisis.

Beyond value of shares to shared value

As we look towards a post-pandemic future, every company must consider their raison d’etre. Why they exist, their purpose and how they will create value—not just to shareholders but to extended stakeholders: their customers, employees, and the wider community. Defining a clear organizational purpose acts as the North Star to guide not only the overall corporate strategy but the operating model itself. Sustaining a sense of purpose over time means creating an understanding of how all levels and roles contribute to the organizational purpose.

 

Foresight begets agility and resilience

In a world of massive data proliferation, every company is challenged to derive insight from information. It’s another challenge that’s been exacerbated by the crisis. In fact, 68% of executives we surveyed ranked capturing insights as the most important element of the organization’s operating model for adapting to the COVID-19 crisis. Yet only 17% had full confidence their organization had the necessary insights to make the right business decisions.

Ecosystems as agents for change

90% of C-suite respondents consider building an ecosystem business model important for their company as they navigate the effects of the pandemic. Why? Partnerships allow organizations to rapidly access capabilities to refine their market approach. By turning to a trusted network of partners and alliances, companies can access the customers, capabilities, talent, and ideas needed to respond to changing market trends, new technologies, emerging competitive threats, and regulatory changes.

93%

of C-suite executives surveyed by Accenture said their existence is jeopardized by operating models that can’t keep pace.

74%

feel they will need to completely rethink their operating models to be more resilient as a result of COVID-19.

68%

of executives ranked capturing insights as the most important element of the organization’s operating model.

Making the change

By designing the operating model to create a state of perpetual motion, organizations can withstand unexpected disruption and rapidly exploit new opportunities. Here are some concrete actions for building agility and resilience.

Organizations need to put in place the right governance to ensure their operating model is consistent with their purpose and values. They should ask themselves: How should we organize the workforce and transition the way work is done? What can we do to foster an environment that promotes a culture of experimentation and innovation?

Making the right moves when it comes to technology is nothing less than “make or break”. This can necessitate taking a two-pronged approach: Modernizing by making investments in new technologies, and evaluating existing systems to make sure they’re being used to the fullest.

Smaller, multi-disciplinary teams (“squads”, “pods” or “cells”) operating like discrete businesses within the organization can help boost agility and responsiveness. These squads, built around specific objectives, products or services, are available for the organization to "plug and play" at will. Bringing together varying skillsets, they break down functional silos and hierarchies and help drive innovation and customer engagement.

Organizations should take a fresh look at what each ecosystem partner has to offer. What are their strengths and weaknesses? What new services, capabilities and channels can they offer to help achieve long-term objectives? How can partners help drive innovation, develop new products and services faster, enter new markets and promote agility?

Empowering the organization with the ability to share real-time data across the enterprise boosts collaboration and drives better decision-making “at the edges” of the organization, in areas closer to the customer. This requires not only the right technology tools, but also the right practices. Inherent in this: Allowing employees to act with more autonomy and make decisions on what they see in the data.

Reskilling the workforce can never be a “one and done.” Instead, companies need to develop a culture of continuously adapting and building the skills of their people. Of particular importance is providing the workforce with the skills required to work with the latest technologies, creating a Human+Machine collaboration mindset.

Resilience now and in the future

Companies looking to gain the resilience and agility demanded by today’s competitive environment—in the short-and long-term—need to focus on their operating models. Specifically, that means harnessing insights, structuring and reskilling the workforce and re-invigorating partnerships to maximize organizational flexibility.

Paul Jeruchimowitz

Senior Managing Director – Operating Model & Organizational Design, Global Lead

Paul helps organizations design, implement and optimize large-scale integrated operating model and business services transformation programs.

Kent McMillan

Managing Director – Operating Model & Organizational Design

Kent works with executives to drive growth through enterprise-wide business transformations that enhance customer experiences and efficiencies.

Katherine Mohrig

MANAGING DIRECTOR – CEO & ENTERPRISE STRATEGY

Katherine works with companies on their most critical business and operating model transformations.

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