By mbretous@hubspot.com (Martina Bretous)

If you are running a business, odds are, you’ve already figured out your business model.

It’s usually the first thing entrepreneurs build out, as it’s key to figuring out the value you’re bringing to the market and consumers.

But what about your people, processes, systems, and technology? Those are all key components of your business that should be outlined in your operational model.

Let’s dive into what an operational model is and how it compares to a business model, plus cover the steps to create one today.

Many people confuse business models with operating models. However, they outline different things and serve different purposes.

A business model outlines how a company captures and offers value through its products/services, value proposition, customer segments, key partners, etc. An operating model, on the other hand, lays out how a company will run in order to deliver that value.

So, in simple terms, a business model looks at the what. An operating model focuses on the how.

Let’s take the example of a fictional lifestyle business called EarthBound. Their business model will describe their sustainable and eco-friendly approach as their value proposition, outline their various product lines, lay out their customer channels through brick-and-mortar and ecommerce stores.

Their operating model will focus on how they source their products, the roles they need within the company, the systems they use in each business area, their data management plan, and more.

Unsure why you should design an operating model? Here are the benefits:

• It helps you identify the systems and structure necessary to serve your customers in a way that’s in line with your larger strategy.
• It’s a blueprint for how resources are organized and operated so, that serves as a baseline from which to scale your business.

Operating Model Template

When you build out your operating model, you focus on three key elements: process, people, and technology.

There are two approaches you can take: role-based or process-based.

When you take the role approach, you design your operating model based on hierarchy and the roles within your company. With a process approach, you focus instead on the journey to deliver value to your consumers.

The template you follow will depend on what makes the most sense for your business based on strategy. For instance, say you’re reviewing your operating model because you’re considering restructuring or reallocation of resources. In this case, a process-based approach may work best.

What You Need To Build Your Operating Model Design

You have to start by asking yourself: “How do we manage our resources to effectively run our business and deliver our services as intended while meeting our goals?”

As you start to think about that, focus on each area outline here.

1. Strategy

To build your operating model, you first need to be clear on your strategy.

This is because your strategy and core priorities will inform your operating model. Once you define it, the next step is creating a set of …read more

Source:: HubSpot Blog

Author: Aaron