Operating Model Transformation: Redesign the Decisions That Drive Performance

An operating model earns its value in the moments when strategy becomes action: a bid is approved, a production exception is resolved, a customer commitment is made, or capital is released. Transformation should improve those moments. Too often, it changes reporting lines while leaving the underlying decisions untouched.

Recent headlines offer several entry points. Consultancy-me.com examines agentic AI’s influence on operating models. Fortune highlights the CFO’s potential to lead AI-driven transformation. Telefónica describes simplifying its Spanish operating model to capture synergies, support growth and scale digital services internationally. These are different starting points for the same executive question: how should the enterprise work to deliver its strategic priorities?

The answer requires more than structural simplification or technology deployment. It requires a deliberate connection between outcomes, authority, capabilities and economics.

Start with the decisions that constrain value

The most useful unit of operating model design is often not the function, but the decision that crosses functions.

Consider a construction business pursuing more disciplined growth. Commercial teams may seek faster bid approvals, operations may want stronger delivery safeguards, and finance may insist on tighter working-capital requirements. Each objective is reasonable. The operating model fails when nobody owns the trade-off, information arrives in incompatible formats, or escalation becomes the default route to agreement.

A better design begins with the intended outcome: winning work the enterprise can deliver profitably within its risk appetite. Leaders can then specify who recommends, who decides, what evidence is required, and which exceptions need escalation.

Apply this logic to a small set of consequential workflows before redrawing the organization. In energy, that might be maintenance prioritization. In medical technology, product-change governance. In logistics, service recovery. These are illustrative choices, not universal prescriptions. The right starting point is where delay, fragmentation or unclear accountability most directly undermines strategy.

Structure should follow the work and its decision requirements—not substitute for defining them.

Simplify coordination without weakening control

Telefónica’s announcement explicitly links operating model simplification with synergies, growth and international scaling of digital services. The broader design lesson is to judge simplification by what it enables, not merely by how many organizational boxes disappear.

Some activities benefit from common standards and shared capabilities. Others require authority close to customers, assets or local regulators. Executives should resist treating centralization and decentralization as opposing ideologies. They are design choices with different economic and operational consequences.

A practical approach separates three questions:

• What must be common? Examples include core data definitions, risk thresholds and performance measures.
• What should be shared? Specialist expertise, technology platforms and selected support services may benefit from scale.
• What must remain local? Decisions requiring immediate operational context or market-specific judgment may need delegated authority.

AI makes these boundaries more consequential. Consultancy-me.com’s headline places agentic AI within operating model transformation, rather than treating it solely as a technology issue. Where software can initiate actions, leaders must define permissions, intervention points and accountability before expanding its remit.

Automating a fragmented workflow can accelerate fragmentation. Redesigning the workflow first creates a clearer basis for automation—and for human oversight where consequences demand it.

Make economics and adoption part of the design

Fortune’s focus on CFO leadership raises an important governance point: operating model transformation needs financial discipline from the outset, not a benefits review after implementation.

The CFO can help distinguish released capacity from realized savings, faster processing from improved cash conversion, and local efficiency from enterprise value. Operational leaders must jointly own those outcomes; finance cannot deliver them through measurement alone.

For every material change, establish a baseline, an accountable owner and a credible path from new ways of working to business results. If a redesigned process saves employee time, specify whether that capacity will support growth, improve service or reduce expenditure. Do not count the same benefit twice.

Adoption also belongs in the design. SSON’s headline connects political experience with business transformation. That framing invites leaders to consider whose authority, incentives or professional identity a proposed change affects.

Consultation is not a substitute for decisions, but it helps expose implementation risks. Managers need clarity on what they will stop approving, what they will become accountable for, and how performance expectations will change. Without those adjustments, the old operating model can survive beneath the new chart.

What leaders should do now

Select one strategically important workflow with visible friction. Assign an executive owner, map its critical decisions and establish a performance baseline. Redesign authority, handoffs, controls and incentives together; then test the technology required to support them.

Scale only when the new approach demonstrates better outcomes and workable accountability. Operating model transformation succeeds when the enterprise makes better decisions repeatedly—not when it announces a new structure.