Designing a Target Operating Model (TOM) is a crucial step for any organization seeking to improve performance, adapt to strategic shifts, or streamline operations. While a Capability Map (See our article Mapping success: how capability maps drive strategic clarity) outlines what an organization needs to be able to do to deliver its strategy, the TOM defines how the organization should operate to make these capabilities real.
To set the stage, here is how we define a TOM:
“A Target Operating Model (TOM) is a visual outline of the key roles, responsibilities and interactions required for an organization to operate effectively and deliver its strategic capabilities.”
In practice, a comprehensive TOM typically covers five integrated elements:
· Organizational Structure: Departments, reporting lines, governance
· People & Culture: Roles, responsibilities, skills, leadership
· Processes: End-to-end workflows, accountability, decision-making
· Technology & Systems: Digital platforms, tools, data management
· Performance & Metrics: KPIs to track progress and improvement
Together, the Capability Map and TOM provide a coherent view of the organization’s future state. Yet, the TOM design is often the “easy” part. The real challenge – and the real value – comes from translating a conceptual model into a functioning organization.
This article outlines what typically triggers a TOM (re)design, how to translate it into an operating organization, focusing on Organizational Structure and People & Culture, and the key lessons learned from previous projects.
Why (Re)Design a Target Operating Model?
A TOM becomes relevant whenever an organization needs to adjust the way it operates to better deliver on its strategic objectives. Companies typically (re)design their TOM when:
- Strategy evolves (new markets, new products, acquisitions)
- Performance gaps emerge (inefficiencies, unclear accountabilities, siloed decision-making)
- Technology transforms ways of working (digitalization, automation, platform shifts)
- Scaling becomes necessary (growth or restructuring)
- Regulatory or compliance requirements force change
Beyond responding to specific triggers, organizations redesign their Target Operating Model to unlock tangible benefits. A well-defined TOM:
- Translates strategy into execution, aligning capabilities, structure, and ways of working
- Clarifies roles, accountabilities, and governance, reinforcing decision-making, control, and employee engagement
- Improves efficiency and coordination, by reducing overlaps and streamlining workflows
- Enhances agility and scalability, supporting growth, transformation, and change
Whatever the trigger, a TOM redesign sets the direction. But the real transformation only happens when the model becomes embedded in the organization’s structure, people, and day-to-day practices.
Putting a TOM Into Practice: Three Core Phases
As outlined in the introduction, a TOM spans organization, people, processes, technology, and performance. This article mainly focuses on the first two dimensions— Organizational Structure and People & Culture —without diminishing the importance of the others.
1. Organizational Design
Once the TOM is defined, the first implementation step is converting it into a concrete organizational setup.
What this phase aims to achieve:
Provide clarity on roles, functions, sizing, and reporting lines, turning the TOM into a tangible organizational design.
Key activities:
- Function
design:
Group roles into functions and create clear function descriptions, ensuring strategic alignment and operational coherence. - Workload
& Capacity:
Analyze the workload associated with each future role or function, compare it with existing capacity, and identify gaps or optimization opportunities. - Organizational
structure:
Build the organizational chart, define reporting lines, and position functions appropriately in the hierarchy.
Our experience:
Role clarity is more important than the org chart itself. Ambiguities here lead to delays and operational friction later.
2. Staffing
Even the best-designed model remains theoretical until people are assigned to roles.
What this phase aims to achieve:
Match skills with the new organization and prepare people for success in their new responsibilities.
Key activities:
- Role Assignment:
Map existing talent to required competencies, assign individuals to roles, and proactively launch recruitment for remaining gaps (internal or external). - Training &
Onboarding preparation:
Define learning paths, anticipate TOM-specific training, and ensure budgets are aligned with training needs.
Our experience:
Early action on staffing is one of the strongest accelerators of TOM implementation. Recruiting key roles – especially at management level – is essential to refine the model and prepare teams for change.
3. Post-Go-Live Support
Once the organization launches the new TOM, teams need support to adopt new responsibilities and ways of working.
What this phase aims to achieve:
Stabilize the organization, accelerate adoption, and ensure performance targets are met.
Key activities:
- Transition
Support:
Provide close support through coaching, feedback loops, and targeted training. Help people adapt to new expectations and collaboration patterns. - Performance
management:
Align performance processes with the new roles and structure, ensuring accountability and clarity.
Our experience:
Ensure performance indicators and governance frameworks are redesigned in line with the TOM. Without this alignment, the organization will slip back into old ways of working.
Key Take-Aways from our Experience
Across our projects, several recurring lessons have proven critical to successful TOM implementation:
1. Align early on concepts and definitions
Misalignment on basic TOM terminology can lead to endless, unproductive discussions about semantics. Before designing anything, ensure everyone shares the same understanding of key concepts.
2. Secure management buy-in as early as possible
Alignment with the impacted management team is critical – even if it takes time. Early support from leadership accelerates decision-making and strengthens credibility. When appropriate, involve team leads later for detailed validation and ownership.
3. Co-create, don’t impose
Designing the organization with managers and staff rather than for them increases buy-in and reduces rework.
4. Don’t underestimate change management
New roles, new interactions, new governance – these require communication, coaching, and time. Without formal support, adoption slows down significantly.
5. Keep decision-making practical
Avoid the trap of over-perfection. Progress beats perfection: move forward based on the best information available and refine iteratively.
Conclusion
A Target Operating Model is a powerful lever for aligning strategy and execution. But its impact depends on how effectively it is translated into the organization’s reality – its people, roles, and daily routines.
Organizations that embrace such a structured approach, secure alignment, and prepare for adoption are far more likely to turn their TOM into reality.