Customer-Focused Operating Model Transformation

Our client, a 16,000 person, £2 billion / $2.5 billion revenue subsidiary of a global construction giant, was facing declining market share and profitability. With urgent pressure to reverse this trend, the company opted for a strategic transformation rather than relying on cost-cutting measures. Their aim was to redefine customer focus, create differentiated value propositions, and redesign their operating model to align with this new strategy.

 

We partnered with the client to facilitate and guide the transformation, building a combined consultant and client team to co-develop a new customer-focused operating model. Engaging over 300 people in testing and piloting new ways of working, we laid the foundation for a turnaround. Within two years, the company had regained market share and improved profitability.

 

Lack of Strategy Limiting Future Growth

 

The organization faced a critical need to rethink its approach to the market, with several systemic issues holding it back:

 

• Lack of strategic clarity: The executive team could not describe its competitive strategy, identify core customers, or define a compelling market proposition.
• Complex executive structure: An unclear strategy was reflected in a complicated matrix structure, leading to confusion and inefficiencies.
• Low trust and collaboration: Functional silos, slow decision-making, and unclear accountabilities undermined collaboration.
• Customer misalignment: Metrics focused on internal performance rather than customer needs, leading to missed opportunities.
• Capability deficits: Missing critical capabilities in customer management and supply chain limited the ability to deliver value.
• Core processes and governance gaps: Key business processes and governance mechanisms were not aligned to drive focus and prioritization.

 

Addressing these challenges was critical to avoid sinking into loss-making territory and to build a sustainable path forward.

 

Redesigning the Operating Model Around Customers

 

We partnered with the client to co-create a customer-focused operating model aligned with their strategy for growth through customer intimacy. A joint consultant and client team worked collaboratively to develop a high-level concept and detailed designs.

 

Key steps included:

 

• Defining critical capabilities and design principles: Agreed on critical capabilities and design principles required to deliver the new customer-focused strategy.
• Developing the organizational blueprint: Designed clear accountabilities, roles, and structures for each function, ensuring the organization had the skills, processes, and governance to deliver its strategy.
• Targeted Sales and Operations focus: Created a main Sales and Operations organization to focus on a chosen target customer segment, addressing a £4 billion / $5 market with a compelling new value proposition.
• Piloting the new model: Conducted four local pilots, engaging over 300 stakeholders to test the operating model and gather insights to refine the design before full implementation.
• Embedding customer-centric behaviors: Defined the beliefs, habits, and skills needed to drive customer intimacy and built them into the new operating model.
• Streamlining decision-making: Set up a “clearing house” to enable rapid feedback and resolution of design challenges.
• Coaching leaders: Provided coaching for executives and pilot leaders to build their ability to lead the transformation effectively.

 

This structured approach ensured alignment across functions and levels while building internal capability to sustain the change process.

 

Re-capturing Market Share and Profit

 

The transformation resulted in a new customer-focused organization with improved functional capability at the center and devolved accountability for local business units.

 

Key achievements included:

 

• Strategic clarity: Enabled the organization to focus on delivering distinctive value propositions for specific customer segments.
• Enhanced customer experience: Developed improved capabilities to drive customer insights and experiences.
• Improved accountability: Established clear accountabilities and streamlined decision-making, fostering collaboration and efficiency.
• Aligned processes and governance: Implemented core business processes and governance mechanisms to prioritize the organization’s strategic intent.
• Change readiness: Built capability within the organization to sustain the transformation and roll out the blueprint across the business.
• Performance turnaround: Laid the foundation for recapturing market share and increasing profitability within two years.

 

The program positioned the company for short term performance improvement and long term growth, with a customer-focused operating model that continues to deliver results.

 

To learn more about our work, contact us at info@orgdesignworks.com