Organisation & Operating Model Design in Strategy Work
A company can have a brilliant strategy and still fail because work moves through the wrong hands, decisions wait in the wrong meetings, and teams optimise their own targets instead of the customer outcome. That is why organisation and operating model design is not about drawing boxes - it is about designing how value actually gets delivered.
- Organisation design decides how people, roles, reporting lines, decision rights and incentives are arranged to execute strategy.
- Operating model design decides how capabilities, processes, technology, governance and metrics work together to deliver value.
- The sequence is: strategy - capabilities - operating model - organisation structure - KPIs. Never start with the org chart.
- Use the Star Model logic: structure, processes, rewards, people and decision rights must reinforce each other.
- The best design is not always leanest or most centralised - it depends on trade-offs such as speed vs control, local responsiveness vs scale, and innovation vs standardisation.
- Interviewers test whether you can redesign the system of work, not just reduce headcount.
- The killer mistake: recommending “remove layers” without proving which decisions, processes or customer outcomes improve.
Big Picture: Strategy Chooses the Game, Operating Model Builds the Machine
Think of strategy as the promise the company makes to the market; the operating model is the machine that keeps that promise every day. Organisation structure is only one visible part of that machine.
The Core Logic: Design the Work Before the Boxes
In strategy work, organisation and operating model design usually appears after a company has changed its ambition: entering a new market, reducing cost, integrating an acquisition, digitising a business, scaling a start-up, or turning around poor performance. If the strategy changes but the work system stays old, execution breaks.
A strong answer separates two related but different questions:
For example, a bank launching a digital lending product should not merely create a “digital team.” It must define the credit underwriting capability, customer onboarding journey, fraud controls, product-tech squads, risk decision rights, partner integrations, and performance metrics. Only then should it decide whether teams sit centrally, inside business units, or in cross-functional squads.
The Five Design Choices Consultants Actually Test
Most organisation design problems can be solved by working through five design choices. They are connected - changing one without the others creates friction.
If you are solving a case where the root issue is still unclear, revise defining the problem before solving it first. Operating model work becomes dangerous when you redesign the wrong problem.
The Main Structural Archetypes and When to Use Them
There is no universally “best” structure. The right structure depends on where the company needs speed, control, customer intimacy and economies of scale.
What to Measure After a Redesign
A redesign is only real when performance changes. In case interviews, name the metrics you would track before and after implementation.
For cost cases, connect org redesign to actual economics rather than vague “efficiency.” The natural next topic is recommending cost reduction without killing growth, because a bad redesign often saves salary cost while killing revenue momentum.
Definitions You Can Say in One Breath
- Organisation design: the arrangement of roles, reporting lines, decision rights, incentives and governance to execute strategy.
- Operating model: the blueprint for how capabilities, processes, technology, people and partners deliver value repeatedly.
- Decision rights: explicit ownership of who recommends, approves, executes, is consulted and is informed for key decisions.
- Governance: the forums, cadences, escalation paths and performance reviews through which decisions are made and monitored.
- Capability: an organisational ability that combines people, process, technology, data and know-how to perform valuable work.
Case Study: IndiGo and the Power of a Coherent Operating Model
IndiGo shows how a focused operating model can support a clear market position: reliable, affordable air travel through disciplined standardisation.
Situation. Indian aviation is operationally unforgiving: price-sensitive customers, congested airports, weather disruptions, high asset costs and tight turnaround windows. In that context, an airline cannot win only through advertising or route expansion. The operating model has to make punctuality and cost discipline repeatable.
The move. IndiGo built a low-complexity operating model around standardisation. The primary driver was operational consistency - especially a standardised fleet philosophy and tight turnaround routines. Supporting drivers included a focused service promise, dense route planning, disciplined crew and ground operations, centralised operational control, and strong performance tracking.
Outcome and lesson. The strategic lesson is not “IndiGo wins because it is low cost.” That is too shallow. The stronger answer is: IndiGo’s model aligns market positioning, fleet and process standardisation, route economics, employee routines and operating metrics. In interviews, that is exactly how you should explain organisation and operating model design - as a mutually reinforcing system.
How AI Changes Organisation & Operating Model Design
AI is changing this topic in a very practical way: consultants can now diagnose work patterns faster, redesign processes with more evidence, and simulate the impact of new roles before changing the org chart.
Practical student workflow: put the case prompt, company annual report excerpts and your draft operating model into ChatGPT or Claude, then ask: “List the top five failure modes in this target operating model, the missing decision rights, and the KPIs I should track.” For live case practice, combine this with practising cases with AI as a mock interviewer.
Interview Relevance
“A fast-growing services company has rising costs, slow decisions and inconsistent customer experience across regions. How would you redesign its organisation and operating model?”
Use the phrase “I would redesign the work system before the reporting lines.” It signals maturity and prevents your answer from becoming a simple headcount-cutting exercise.
If you want a realistic practice prompt in the same direction, try the case of a services business with rising costs.
Common Mistake
The mistake: jumping straight to “reduce layers,” “centralise functions,” or “create squads” without proving what work, decisions or customer outcomes will improve. Why it costs candidates: it sounds like org-chart decoration, not strategy work. One-line fix: start with strategic intent and critical capabilities, then design processes, decision rights, structure and KPIs in that order.