Task B1.5: Review Operating Model

What is Task B1.5?

Task B1.5 is part of the "Orient" phase in the Viability Canvas methodology, specifically within the "Review the results of the Analysis" step (Step B1). This task instructs you to "Based on the answers to these questions, you should be able to address the crucial issue: How complete and up to date is the operation model?"

Purpose of Reviewing the Operating Model

The purpose of this task is to evaluate how well the organization's current operating model supports its viability, based on your analysis of its VSM components. This serves several important functions:

1. Synthesizing insights: Drawing conclusions from the previous review tasks (B1.1-B1.4)
2. Assessing overall fitness: Evaluating the organization's structure for current and future challenges
3. Identifying systematic patterns: Recognizing cross-cutting issues that affect multiple functions
4. Setting improvement direction: Creating a foundation for determining how much change is needed
5. Creating urgency awareness: Establishing a clear view of how well-prepared the organization is

By reviewing the operating model, you create an overall assessment of organizational viability that will guide the scale and focus of your improvement efforts.

Understanding the Operating Model

In the context of the Viability Canvas, the "operating model" refers to:

• The overall configuration of VSM functions (Systems 1-5)
• The relationships and information flows between these functions
• The resource allocation across different functions
• The decision-making structures and processes
• The alignment between structure and environmental demands

This represents how the organization is designed to function as a viable system, beyond individual components to the integrated whole.

How to Complete Task B1.5

To review the operating model:

1. Synthesize findings from previous tasks:
   • Consider the identified strengths (B1.1)
   • Review the missing parts (B1.2)
   • Assess the inadequate parts (B1.3)
   • Note the unmapped elements (B1.4)
2. Evaluate overall completeness:
   • Are all essential VSM functions present and working?
   • Do the functions work together as an integrated system?
   • Are there critical gaps that threaten viability?
   • Is there appropriate balance across different functions?
3. Assess currency and relevance:
   • Is the model designed for current environmental challenges?
   • Does it reflect the organization's current purpose and strategy?
   • Are functions sized appropriately for their responsibilities?
   • Has the model evolved with changing circumstances?
4. Consider system-level patterns:
   • Is there consistent overemphasis or underemphasis of certain functions?
   • Are there recurring themes in the inadequacies?
   • Do structural issues affect multiple parts of the system?
   • Is there coherence between different parts of the model?
5. Document your assessment:
   • Overall evaluation of the operating model
   • Key strengths and weaknesses at the system level
   • Urgency assessment for making improvements
   • Preliminary view on scope of changes needed

Example Application

In an application of the Viability Canvas to a manufacturing company:

"Based on their analysis, the team concluded that the company's operating model was significantly outdated and incomplete. While basic operational functions (System 1) were well-established, the model showed serious deficiencies in coordination mechanisms (System 2), was overly centralized in operational management (System 3), lacked systematic audit functions (System 3*), and had severely underdeveloped future-focused capabilities (System 4). The identity function (System 5) was present but disconnected from operational reality. Overall, the model reflected a company designed for a stable, predictable environment that no longer existed, creating urgency for substantial modernization."

This assessment provided a clear picture of the overall state of the operating model, creating both urgency and direction for subsequent improvement planning.

Key Considerations for Operating Model Review

When reviewing the operating model:

1. Consider environmental fit: Assess whether the model suits the complexity and dynamism of the environment
2. Look for balance: Evaluate the relative development of different functions and their proportionality
3. Assess integration: Consider how well the parts work together as a coherent system
4. Identify recurring patterns: Look for systematic issues that appear across multiple functions
5. Consider evolutionary capacity: Evaluate how well the model can adapt to changing circumstances
6. Balance critique with appreciation: Recognize both strengths and weaknesses in the current model

By thoroughly reviewing the operating model, you create a comprehensive assessment that will inform the scale, focus, and urgency of your improvement efforts in the subsequent phases of the Viability Canvas process.