Strategy Execution Operating Model

Execution is the critical determinant of success in any strategic operating model. Achieving effective execution requires full coordination across all business units and levels of the organization, ensuring alignment with the overarching strategic vision. To support business and enterprise architects in this endeavor, we have identified the key elements that define our Strategy Execution Operating Model[i]. These elements are summarized in Figure 1 above and are explained in greater detail in the sections that follow.

1. Strategy

A well-defined strategy is the foundation of any successful organization. It provides direction, purpose, and a framework for making decisions. The core elements of strategic planning include a mission, a vision, elaborated answers to the questions “where?” and “how to win?”, sources of growth, drivers of value, customer segments and needs, business capabilities, goals, objectives, KPIs, and your strategic initiatives.

Mission, Vision

The mission defines your enterprise’s core purpose and reason for existence, serving as a guiding star for all activities. The vision paints a vivid picture of the future, outlining where your organization aspires to be in the long term. Together, the mission and vision inspire stakeholders and align efforts across your organization. A firm’s vision should be clear enough to answer in a few words the questions “where?” and “how to win?”.

Where? How to Win?

Determining "Where to play?" involves selecting the markets, customer segments, and geographies where your enterprise is and will compete. "How to win?" defines the competitive advantage, whether through cost leadership, differentiation, innovation, or customer intimacy. Clear choices in these areas are crucial to focusing resources and efforts effectively.

Sources of Growth

Identifying sources of growth is essential for long-term sustainability and competitive advantage. Growth can stem from expanding into new markets, launching innovative products, forming strategic partnerships, or pursuing diversification opportunities. Successful growth strategies must align closely with your enterprise's core capabilities, strengths, and the evolving dynamics of the market. By focusing on areas where they can create differentiated value, companies ensure their initiatives are both achievable and impactful, driving sustained success over time.

Drivers of Value

Your organization must clearly identify what drives value for both customers and shareholders. Key drivers may include operational efficiency, superior customer experience, strong brand reputation, or technological innovation. By prioritizing these areas, your company must ensure that its strategies remain focused, competitive, and aligned with the fundamental sources of sustainable business value.

Customer Segments and Needs

Deep insights into customer segments and their specific needs enable targeted value propositions. Segmentation based on demographics, behaviors, needs, and preferences allows for more personalized and effective strategies.

Business Capabilities

Capabilities, which include the skills, technologies, and processes that differentiate an organization, are critical for effective strategy execution. Identifying, developing, and strengthening core and detailed business capabilities ensures the enterprise can deliver on strategic objectives, adapt to market demands, and maintain a sustainable competitive advantage over time.

Goals, Objectives, and KPIs

Clear goals and objectives translate strategy into measurable outcomes. Key Performance Indicators (KPIs) track progress and ensure accountability, providing a quantitative basis for evaluating the success of your organization.

Strategic Initiatives

The identification of strategic initiatives to reach the goals set by the top management of your organization. Strategic initiatives are large-scale projects or programs that drive major changes needed to achieve your strategic goals. These initiatives must be prioritized, resourced, and actively managed to deliver precise and SMART[ii] desired outcomes.

2. Operating Model

An effective operating model bridges the gap between strategy and execution. It defines how your organization is structured, governed, and operates to deliver value using value streams, business capabilities, and business processes.

Structure

Your organizational structure defines roles, responsibilities, and reporting relationships. Structures can be functional, divisional, matrixed, or networked, depending on strategic priorities and operating complexities.

Accountabilities

Clear accountabilities assign ownership for each strategic objective, ensuring responsibility for outcomes. Well-defined roles and decision rights eliminate ambiguity, streamline collaboration, and accelerate execution. By establishing who decides and who delivers, organizations enhance focus, drive faster action, and improve overall strategy implementation.

Governance

Governance establishes the decision-making framework, policies, and controls that guide organizational behavior. Effective governance promotes transparency, accountability, and strategic alignment.

Value Streams

Value streams are at the heart of many agile methodologies, including SAFe[iii]. Value streams represent the end-to-end flow of activities that create value for your customer segments. Mapping and optimizing value streams, with enabling capabilities, participating stakeholders, and required information, improves the delivery of your initiatives, the efficiency of your firm, reduces waste, and enhances customer satisfaction. Detailed value stream mapping will allow you to find high-priority and low-performing capabilities and missing data to provide value to a customer segment, as explained in the book entitled “Practical Guide to Agile Strategy Execution: Design, Architect, Prioritize, and Deliver your Corporate Future Successfully”.

Capabilities

Capabilities within the operating model refer to the essential activities and competencies required to deliver strategic value. These include people capabilities, technological capabilities, and process capabilities.

Processes

Standardized and optimized processes underpin consistent and efficient execution. Processes should be documented, continuously improved, and aligned with strategic goals and customer needs.

3. Execution

Execution translates strategy and operating model design into reality. It involves meticulous planning, change management, performance monitoring, and risk mitigation.

Planning (Who, When, Where, What, How)

Detailed planning answers critical execution questions:

Who: Assigns responsibility and accountability,
When: Defines timelines and milestones,
Where: Identifies operational locations or markets,
What: Specifies tasks, deliverables, and objectives, and
How: Determines methodologies, tools, and processes to be used.

Integrated planning ensures that all parts of your organization are aligned and coordinated.

Detailed Capability-Based Roadmap

A capability-based roadmap directly connects strategic priorities to targeted capability developments over time. It defines what must be built, enhanced, or acquired to achieve strategic objectives, ensuring a deliberate, structured approach. By providing a clear timeline, resource allocation plan, and sequencing of initiatives, the roadmap enhances strategic clarity, focuses investments, and drives coordinated execution across the organization.

Change Management

Successful execution hinges on effective change management[iv], ensuring individuals and teams are prepared, supported, and equipped to adopt new ways of working. This process involves proactive communication planning, meaningful stakeholder engagement, targeted training programs, and strategies to anticipate and address resistance. By embedding change management into execution efforts, organizations build resilience, accelerate adoption, and sustain the impact of strategic initiatives.

Reinforce Key Behaviours

Culture is a vital driver of strategy execution. Organizations must define and promote key behaviors that align with strategic goals. By leveraging recognition, tailored incentives, and consistent leadership modeling, companies can embed these behaviors into daily operations, strengthening alignment, enhancing performance, and ensuring sustainable success.

Performance Management

Performance management systems are essential for tracking progress toward strategic goals, delivering timely feedback, and enabling necessary course corrections. Tools such as regular performance reviews, balanced scorecards, and real-time dashboards provide visibility into organizational performance. These systems empower leaders to make informed decisions, drive accountability, and foster continuous improvement, ultimately aligning individual and team efforts with broader strategic objectives.

Feedback Loops

In agile organizations, continuous feedback loops are crucial for sustained success. They enable organizations to learn quickly, adapt to changing conditions, and enhance execution. By systematically gathering insights from customers, employees, and operational data, organizations can identify opportunities for iterative improvement. This dynamic approach fosters innovation, accelerates responsiveness, and ensures that strategic initiatives remain aligned with evolving needs and market demands.

Mitigate Risks

Agile organizations are no exception when it comes to risk management. Minimizing risks is essential to successful execution. By identifying potential threats, assessing their impact, and developing proactive mitigation plans, organizations can address obstacles before they escalate. Effective risk management spans strategic, operational, financial, and compliance areas, ensuring resilience and adaptability. This disciplined approach supports agile principles by enabling faster, more confident decision-making in dynamic environments.

In today’s dynamic business environment, flawless execution is the bridge between strategy and sustainable success. Our Strategy Execution Operating Model provides a comprehensive framework to ensure strategic clarity, operational efficiency, and agile adaptability. By aligning strategy, operating models, and execution practices, organizations can achieve cohesive action across all levels. Through disciplined planning, cultural reinforcement, performance management, feedback loops, and risk mitigation, enterprises can confidently navigate complexity, drive continuous improvement, and realize their long-term vision with resilience and precision.

__________________________________________

[i] The Strategy Execution Operating Model was partly inspired by the Bain Operating Model Bridge. You can view a video here: https://youtu.be/hsf4lCF6S0U.

[ii] SMART: The SMART criteria is a widely used framework for setting clear and effective goals across various domains, including organizational planning. This concept was first introduced by George T. Doran in the November 1981 issue of Management Review, as mentioned here: https://en.wikipedia.org/wiki/SMART_criteria . The acronym SMART stands for the following:

Specific: The goal should be clear and unambiguous, detailing exactly what is expected.

Measurable: There should be criteria to measure progress and determine when the goal has been achieved.
Achievable: The goal should be attainable and not impossible to accomplish.
Relevant: The goal should matter to the individual or organization and align with other relevant goals.
Time-bound: The goal should have a deadline or defined timeframe.

[iii] SAFe stands for Scaled Agile Framework. It is a comprehensive set of organizational and workflow patterns designed to help enterprises scale lean and agile practices across large, complex organizations. For additional information, visit this webpage: https://en.wikipedia.org/wiki/Scaled_agile_framework.

[iv] Change Management is a discipline that focuses on managing changes within an organization. It involves implementing approaches to prepare and support individuals, teams, and leaders in making organizational change. To learn more, visit this webpage: https://en.wikipedia.org/wiki/Change_management.