Sustainable Growth: Transform your Operating Model

One of the few positives that emerged from the Covid-19 crisis relates to the environment. Since the crisis broke out the world is witnessing an increase of interest in environmental issues. This trend was amplified during the crisis and driven by increased attention to health-related issues, as well as a first-hand experience of cleaner skies and less pollution during the lockdown period.

Talking to many senior stakeholders and clients from the market we have observed that this has not gone unnoticed. Following pre-existing market trends on the issue and increased consumer pressures, many companies are planning to adjust their post-Covid strategies and shift towards sustainable growth, reducing their carbon footprint and environmental impact.

Implementing this strategy would require a number of changes in the operating model and its key components: 1) workforce, structure, and incentives 2) supply chain, channels and infrastructure 3) processes and governance and 4) data and technology.

In this article, we provide examples of changes in the four core components of the operating model that you can implement to deliver on your sustainable growth strategy.

Workforce

Understand what the gap is between the skills the company has now, and the skills it needs in the future to successfully implement the new strategy. These may cover:

• Brand new roles and skills that do not exist in the company and must be recruited or acquired. This could include sustainability managers, data scientists, or engineers with experience in working with different materials, etc.
• Changes to existing roles which now need to align with the new strategy and business objectives. People in these roles will have to be trained or upskilled to be able to adapt to the change in their role. For changes that affect entire teams or large groups of employees, company-wide training programmes will need to be created to ensure successful transition to the new role requirements. This could mean changing the role requirements of large workforce segments within manufacturing and supply chain who will now need to work with different processes and equipment, materials, tools etc.
• Identification of roles that will be redundant in the future as a result of the change. It is important to note that this relates to roles, not people. People covering the roles may or may not transition to different positions within the company. An example could be the roles associated with a highly polluting product line which will be phased out as a result of the new strategy.

Structure

As a result of the new strategy, companies will also need to make changes to their structure and design to accommodate for the various changes mentioned above.

• Analyse workforce segments and determine which would be the most valuable to further analyse and transform based on the changes in the strategy and objectives. For example, functions such as Finance, Accounting and Sales may be unaffected (and out of scope for redesign) whereas others like manufacturing, supply chain and HR will be in scope as they would be the main drivers of change.
• Develop a high-level design which covers the changes, including new senior roles, e.g. the creation of a new team that would monitor and improve the company’s performance on sustainability.
• Define the roles that would be required in the new organisation (new or amended existing roles), size the FTE required for the roles and build suitable supervisory structures above them. In practice, this may mean that certain structures will remain unchanged (with smaller changes in existing roles), whilst others may need to be re-designed.
• Undertake a deep dive analysis into existing activities to identify where there can be improvements to align to the new structure. In implementing a sustainable growth strategy, companies would also use the activity analysis to potentially link activities with the metrics around sustainability that they are trying to improve.

Incentives

One of the most important tools to building the culture you want and motivating people to perform is your reward system. The right reward system should always positively reinforce the right behaviours. Given the change of strategy towards sustainable growth, companies will need to align their incentives and rewards systems to incentivise and reward performance in these areas. For example:  

• Include goals related to sustainability in each performance appraisal.
• Create competitions and handover prizes for excelling in sustainability related initiatives.
• Link part of the bonus pool to the company’s track record on implementing the strategy and meeting sustainability targets.

For most business this is the operating model component that will have the largest environmental impact. Changes in this area may cover:

• Reduce environmental footprint of products by making the manufacturing process less carbon intensive.
• Reduce waste in the manufacturing and distribution of products by implementing improved waste management strategies, shortening distances in supply chains, swapping to more environmentally friendly packing materials etc.
• Reduce the use of plastics and other environmentally hurtful materials in product design.
• Improve efficiency in inventory management.
• Incorporate environment-related criteria in vendor due diligence and selection.
• Improve environmental performance and energy consumption of buildings, offices and other facilities.

• Re-design processes to align with operating model changes. During this activity incorporate process improvement targets, aiming to automate processes where possible. Flag processes that can actively contribute towards your sustainable growth strategy and commit more effort and resources in getting them right first time.
• Set up governance structures to ensure clear lines of accountability and embed monitoring of the sustainable growth strategy implementation at the Board, Exec, and functional and team level.
• Add new KPIs and dashboards to periodically review the effectiveness and performance of your sustainable growth strategy implementation, taking corrective action where needed.

• Use data science and analytics to capture, analyse and report on the company’s performance on achieving the targets set on the strategy. Our Carbon Footprint Bot can help you achieve this.
• Use technology and automation to make production processes more efficient and as a result, less energy intensive.
• Leverage AI capabilities as applicable in your industry to support sustainable growth.

Sia Partners has been committed to accelerating carbon emissions reduction and the energy transition for 15 years. 12% of our revenue is generated by offerings related to climate change; we help clients in the public and private sectors navigate the on-going global transition to a low carbon economy. Talk to us to find more about our Climate Analysis Center and how we use data and technology to support organisations minimise their environmental impact.

Data-driven Approaches to Operating Model Design and Workforce Planning

Pivoting your workforce is a key step in modifying the operating model to deliver changes in the strategy or business model. Businesses can pivot their workforce in an intelligent way by leveraging organisational data to develop winning designs and plans.

A common response to this approach is that organisational data either does not exist or it is difficult to obtain. In almost all cases, this is wrong. Organisational data does exist. However, it may not all in one place, the quality may be inconsistent or poor, or records may conflict across functions and systems. Even when it is easy to get, many businesses may not know how to apply it to improve organisational design or operating model alignment.

Sia Partners can help. We bring decades of transformation experience and innovative data science-based solutions to help you rapidly assess the current-state, examine future-state options, and implement impactful change for your organisation. we deploy sophisticated analytics and digital tools alongside our human subject matter experts, ensuring you receive support tailored to your organisation’s context and needs. Our consultants rapidly assess your workforce, financial, and competitor data and define actionable insights that guide every step of the project, from assessment, to detailed design and implementation. Our Transformation Hub, an online portal of proprietary tools and aids, means that you have end-to-end visibility on the design process, with downloadable tools at your fingertips, on-demand, around the clock.

In the near-term, our team can help you understand how your customer demand is changing and how to redeploy your workforce from areas of relatively low-demand to areas of high-demand or higher priority. We can also help you to align near-term workforce decisions to operational measures and targets to ensure you have an agile, nimble base from which to grow in the post-COVID world.

In the intermediate-term, our team can help you model options for the size, shape, and design of your future organisation. We obtain, aggregate and cleanse the most relevant data and then quickly assess your as-is state, delivering quantitative and qualitative insights that help you cut costs, define opportunities, and build a more resilient organisation. We start by helping you create design principles centred on your post-COVID business strategy and objectives. From there, we help assess future-state designs that maximise key variables like profitability, long-term growth, or increased organisational resilience. Lastly, we’ll help manage the full implementation via our dedicated PMO offering.

Alterations to your operating model will also require you to consider the long-term impacts to your workforce. Are you recruiting and retaining the right talent for both today and tomorrow? Is the organisation growing a workforce with the skills and capabilities needed for the future? How is automation altering the workforce and employee base? Again, Sia Partners can help. Our approach to workforce planning uses both proprietary and publicly available data to help you identify the most critical elements of your workforce. We help you to account for trends like automation or technological advancement to craft strategies that strategically plan for both today’s and tomorrow’s needs.

Konstantinos Nikolaras 
Senior Manager
+44 7473 444 942
Konstantinos.Nikolaras@sia-partners.com