Inside the Strategy Room 276. From strategy to performance: Building a new operating model for a new world
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Nov 6, 2025 Julie Goran and Richard Steele, both partners at McKinsey in New York, delve into the art of creating effective operating models for organizations. They explore the reasons traditional structures fall short and discuss the critical elements vital to execution, including governance and talent. Insights into emergent models highlight their advantages in digital adaptability. The pair also share practical strategies for designing operating models and overcoming common challenges like leadership and technology integration, driven by their extensive client experience.
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Operating Model Is Strategy Made Real
- An operating model is the set of organizational choices that translate strategy into execution.
- Organizations routinely lose about 30% of value between intent and delivered performance due to operating-model gaps.
Structure Alone Won't Bridge The Gap
- Structure matters but is insufficient to close the strategy-to-performance gap.
- Leaders often redesign org charts and are surprised when performance doesn't improve.
Design Governance And Processes For Speed
- Focus governance on decision speed, resource prioritization, and cycles that match strategic needs.
- Reimagine processes and skills especially where AI and automation will change how work gets done.