How to Choose an Operating Model Template | ON THE MARK How to Choose an Operating Model Template | ON THE MARK
29th January 2019 Admin

How to Choose an Operating Model Template

In November of 2018, the UK Health Secretary, Matt Hancock, was quoted as saying:

“At the moment we do not have enough leaders. There’s a lot that the NHS can teach others but that doesn’t mean that we should be complacent. Look at what McDonald’s does. They start leadership at shift manager level. They drive leadership training through every level of their company. Restaurant managers learn how to develop a culture of continuous improvement, how to hold their teams and themselves accountable, and how to apply best practice for their outlet.”

If I were a National Health Service (NHS) Manager I’d probably be deeply offended at the notion that the complexity of leading and managing patient care services is somehow comparable with flipping burgers. McDonald’s might well have some good practice, but at a basic level, they only have one service offering: food. Some of their products can be customised, but you are heavily discouraged from doing this as the company prides itself in its efficiency.

Leading a team of people in such an environment, while stressful, is straight-forward. The success KPIs are simple, as is line of sight of the employees on shift. The closest thing to an emergency that a leader of such a team will experience for the most part is too many customers waiting too long for their food and getting annoyed. Hardly life or death.

A manager in the NHS, meanwhile, operates with much higher stakes and competing demands.

If they are a clinician, then they might well have to step in to administer medical care. At this point, they have switched roles from leading people to having responsibility over others’ care and wellbeing, potentially in situations where the wrong call can lead to death of a patient. Even if they are non-clinicians, senior managers can hold the responsibility for deciding what action needs to be taken when an accident and emergency department has reached capacity. In that situation, patients might be rerouted to another hospital meaning emergency care could be delayed, a potentially life-threatening situation.

Within the professions, there are competing ideologies where patient treatment rubs up against cost considerations and where a clinician’s personal ethical boundaries and obligations are challenged, both legally and practically. No one in McDonald’s ever has to choose between extending someone’s life against the exponential cost increases that might occur as a result.

Building an Operating Model Template

At the highest level, the two organisations have very little in common. Of course, you can take learnings from one organisation and apply them to another. However, I would suggest caution. I’ve lost count the number of times I have been on the receiving end of a leader in an organisation wishing to use benchmarks of other organisations to redesign their own. Benchmarking can be useful, particularly in a reward setting where the market is fluctuating, or you need to demonstrate an equal value pay defence, but in terms of your operating model template it’s a waste of time.

The Uniqueness of Each Organisation

Each organisation is unique. In addition to the differentiating factors of the NHS, it also has a difficult political narrative to satisfy. It must juggle demands to increase efficiency and decrease spending on inefficient activities with demands for patient centred approaches to care. If you are in the business of designing an organisation, you firstly need to decide how you want to service your customer base.

The NHS has a vast number of services. Many of these are routine non-emergency type offerings, for example, an MRI scan. The machinery is complex and does magical things, but the basic process is as follows:

  1. A referral is received
  2. A patient is called in for a scan
  3. The patient is put through the machine and there is a scan at the end

Here, the McDonald’s operating model works. No intervention other than running the programme is needed. However, what if the scan shows an abnormality? In the case of cancer, for example, a specialist cancer service is needed. While the MRI service might have been highly efficient, it cannot switch to becoming customer intimate and start treatment of the cancer. There is a shift towards personalisation of medical intervention at this point and the operating model template changes from that of McDonald’s.

One size does not fit all and across all of the cancer cases that are treated in a given year, your diagnosis may be rare and unlike most others.

In reality, the NHS is not a single organisation. It comprises of countless organisations acting under a brand. For example, there are several distinct brand offshoots like ‘NHS England’ or ‘NHS Scotland’ that segment the organisation by geography. These can be further broken down into smaller organisations. Making sweeping statements about the application of leadership practices from a fast food company, such as from Health Secretary Hancock, isn’t valid in such a complex system. A better comparison would be a large complex multinational holding company with a number of separate but related businesses.

Organisations are by nature unique, you can incorporate learnings from others, but it is a dangerous game when it is done so without fully understanding the positioning of your own organisation.

Your Gravitational Pull—Which Are King and Queen?

choosing an operating model template

The first question a leader should ask when addressing an operating model is what is the organisation’s gravitational pull, or focus value? This could be a focus on becoming operationally excellent, customer intimate or a product leader. While you will have a prioritised pull, one will ultimately take the role of King and the other Queen

In the case of the MRI Scanning service, Operational Excellence might well be correct. So, what might result? Well, if I am designing an operating model that is highly efficient, selecting this option would suggest then I am going to prioritise speed, repetitiveness, cost efficiency. Simply put, I want to get as many patients through the scanning process in any given day as quickly, cheaply, and accurately as possible.

In the case of a cancer diagnosis and resulting demand for specialised care, the next part of the organisation (possibly a different company) might be Customer Intimacy or Product Leadership. If it were a fairly routine case, then the service that is offered might be customer intimate. There could be a range of standardised options that the patient. The point is that while the overarching success measure will be remission, the ‘how’ is more bespoke and intimate to the particular customer.

What about if the cancer happened to be unique or maybe the regular treatments have failed? Here the patient might be referred to a leading expert in experimental or new treatments. At this point, the design choices changes to Product Leadership. The customer (patient) is seeking the newest or latest treatment available. It might well be high cost and not many people have had it before. It might even be that the NHS has deemed the treatment too expensive or that it is offered elsewhere in the world. A grim scenario, but these are realities organisations and individuals face on a daily basis.

Conclusion

The overriding point is that comparing organisations is not as simple as identifying one company’s good practices and then copying and pasting over your organisation. It is way, way more complex than this and needs proper and thorough design thinking throughout the value stream(s) in order to be successful. Cherry-picking and grandstanding? Let’s leave that to the politicians while the rest of us get on with real work.


Dr. Stuart Wigham is a Content Manager and Consultant at ON THE MARK. OTM is a boutique organisation design firm with offices in the UK and US. Its experience and passion for collaborative business transformation is supported by pragmatism, systems thinking, and a belief in people.

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