A New Operating Model Won't Save Your Digital Transformation

Approximately two-thirds of organisations have redesigned their operating models in the last two years¹. In our work we’ve observed that organisations often reach for operating model change when digital transformations fail to deliver expected value.

The logic may seem sound: if the technology works but outcomes aren't materialising, the organisation itself must be to blame. Therefore, if we change our operating model, we'll see the results we expected.

This assumption misses the real issue, which lies in a question most organisations don't properly answer before investing millions in technology and transformation: what value do we need to create?

Where most organisations go wrong

Most organisations that redesign their operating model are jumping straight to how they’ll deliver value, without defining what value they need to create in the first place. This is like building a more efficient engine without knowing where the car needs to go.

This happens because the mechanics of delivery feel more tangible and controllable than the strategic work of defining value. Defining differentiated value requires an outside-in perspective, and being brutally honest about the value your organisation actually creates for your customers, employees and stakeholders. So organisations default to redesigning the way they deliver, hoping clarity will emerge from better coordination. It rarely does.

An operating model encompasses how your organisation delivers value through your products and services. It covers the underlying components and mechanics of delivery:

• Technical components: Technology, AI, data
• Human components: Structure, leadership, culture and capabilities
• Delivery mechanisms: Processes, governance and external partnerships.

Defining your operating model will not address:

• What value you aim to create
• A vision for your customer, employee and/or stakeholder experience
• What makes your value proposition compelling or differentiated.

Around 70% of transformation initiatives don’t deliver the desired results, largely because they lack clear vision and defined success metrics from the outset². They optimise delivery mechanisms before clarifying what those mechanisms should deliver.

Technology compounds this problem. Technology functions as an amplifier; it can make things faster, bigger and more efficient. This works both ways: if your value proposition is weak or undefined, technology will increase the scale of that weakness. If your customer experience is mediocre, digital transformation will simply make mediocrity more accessible.

In other words: you might continue to do counterproductive things, just more efficiently.

How to break this pattern

Before investing in technology or redesigning your operating model, ask whether you’ve compellingly answered these three questions:

1. What value do you need to create and for whom?

This extends beyond customer value to include your community, employees, board and shareholders. What new or differentiated value are you creating? What does success look like for each stakeholder group?

If the answer is "we'll do what we currently do, but faster," you haven't answered the question. Go further and consider what value you need to create that you aren’t already doing today.

2. What do these experiences look and feel like in the future?

Understanding differentiated experiences means looking honestly at your competitive landscape, identifying unmet needs and admitting where your current proposition falls short.

This is about more than listing features or functionality. What will people notice? What will change in how they interact with you? What will make those interactions meaningfully better?

3. How will you know if you're successful?

Define the outcomes you're creating and how you'll measure them. Success metrics should centre meaningful outcomes for the people you serve, not just project milestones or indicators of internal activity.

What changes in customer behaviour, employee capability, or business performance will signal that your transformation is working?

Where to start when you’ve already started

If your organisation is already deep into a digital transformation or operational redesign, addressing these questions can feel particularly uncomfortable. It means reconsidering whether your value proposition was compelling enough to invest in, and whether business outcomes were clearly defined before committing technology spend.

Recognising the gap now is far better than discovering it after you've completed the redesign and still haven't delivered the expected value.

The same questions still apply. Once you have clarity on the value you’re delivering, the challenge lies in overlaying that understanding with existing work. The trick is to slow down long enough to properly course-correct.

Are you clear on your ‘why’?

The decision to redesign is a serious investment. Are you certain you've defined the value and experience your technology must enable?

We can help you gain absolute clarity on your strategic objectives and the future experience you must deliver, ensuring your next operating model is designed for success, not just efficiency.

If that's the kind of purposeful transformation you want to lead, get in touch with one of our team.

‍

References

1. Krivkovich, A., Di Lodovico, A., Weddle, B., Maor, D., Mahadevan, D., & Steele, R. (2025, June 18). A new operating model for a new world. McKinsey & Company. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/a-new-operating-model-for-a-new-world‍
2. Garcia, J. (2022, March 29). Common pitfalls in transformations: A conversation with Jon Garcia. McKinsey & Company. https://www.mckinsey.com/capabilities/transformation/our-insights/common-pitfalls-in-transformations-a-conversation-with-jon-garcia