A Pragmatic Approach to Building a Target Operating Model (TOM)
In today’s volatile and complex business environment, organisations can’t afford to operate on outdated structures. The need to align strategic ambitions with practical execution is more pressing than ever. This is where a well-crafted Target Operating Model (TOM) plays a important role. Drawing inspiration from the big consulting firms operating frameworks, and enriched with my experience leading digital transformation initiatives for leading organisations in Europe, this article offers a pragmatic, human-centered approach to defining, designing, and deploying a TOM that truly delivers.
What is a Target Operating Model (TOM)?
A TOM is a blueprint for how an organisation can deliver its strategy more effectively. It encompasses core components such as:
- People – roles, responsibilities, and required capabilities
- Processes – key operational workflows
- Technology – tools, platforms, and automation
- Data – governance, accessibility, and insights
- Governance – decision-making structures
- Culture – behaviours and mindsets aligned to strategic goals
A TOM is not static blueprint, it evolves with the organisation's maturity and market dynamics. It serves as the bridge between strategic intent and on-the-ground execution.
Insights from the Big Consulting Firms
Firstly, It is important to discover the critical role that an operating model plays, and how you can adopt one that's right for you to make the strategy work. McKinsey & Company , Bain & Company , Deloitte and KPMG are some top consulting firms have established TOM frameworks that have influenced transformation programs globally:
- McKinsey's TOM: McKinsey research found transformations that touched seven or more of the 12 elements of an operating model slices were three times more likely to succeed when executing strategy.
- Bain's TOM: It provides an integrated system that unleashes the star power of your teams, ensuring that they are aligned, capable, effective, adaptable, efficient and inspired. They’ll be prepared and motivated to go the extra mile, executing on strategy at speed and with purpose.
- Deloitte’s TOM: It emphasises customer-centricity, agile decision-making, and digital enablement. It highlights the importance of cross-functional alignment and rapid experimentation as organisations strive to become more responsive.
- KPMG’s TOM: It breaks into 6 layers, Process, People, Service Delivery Model, Technology, Performance Insights & Data, Governance. The model provides a structured yet flexible foundation, particularly useful in highly regulated industries.
If you closely look, there is a strong convergence on the foundational elements of a successful TOM. Each firm may visualise or prioritise them differently, common pillars consistently emerge: strategy and vision, organisational structure, business processes, technology and data, and people and talent. These are often surrounded by enabling factors such as governance, leadership and culture, and performance management systems. While all operating models offer valuable guidance, they can sometimes feel overly conceptual to leaders who need to act swiftly and iteratively. That’s where my approach complements them all.
Common Pitfalls When Deploying a TOM
In my work with organisations undergoing digital transformation, I’ve observed several recurring challenges:
- Over-engineering: TOMs that are too complex become shelfware rather than action plans.
- Cultural resistance: People misunderstand the TOM as a threat to their roles or autonomy.
- Leadership disconnect: Executive enthusiasm doesn’t always cascade into middle management.
- Execution gaps: Great strategy documents, but little operational follow-through.
Avoiding these pitfalls requires a focus not only on structure but also on story helping people see themselves in the transformation journey.
A Human-Centered, Adaptive Approach
A mid-sized European Insurance company was undergoing an operational modernisation and I led the definition and design of a new Target Operating Model (TOM) aligned to a customer-centric service delivery approach. The redesigned TOM introduced cross-functional value streams such as Quote to Bind and Claim to Settle, enabling end-to-end ownership and greater agility. We embedded digital tools to streamline workflows and improve transparency, governance while teams were empowered through outcome-based KPIs that reinforced accountability and continuous improvement.
Here’s how I guide organisations build a sustainable TOM:
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1. Define: Rather than start with an abstract model, I begin with the business context and value. In a recent UK insurer engagement, I co-created the TOM by asking executives: What’s holding you back from achieving your growth or service goals? This created a sense of ownership and revealed pain points beyond the obvious (e.g., product complexity, legacy systems, siloed customer data).
I use Value Stream Mapping to understand how work flows across functions and where the biggest blockers are. This becomes the foundation of the TOM design. It’s the difference between designing for structure and designing for flow.
2. Design: I used iterative design workshops to visualize the future state, not just in process maps but in day-in-the-life scenarios of underwriters, claims handlers, and policyholders. We aligned capabilities like AI-powered underwriting and omnichannel service with practical workflow redesign.
3. Deploy: Rather than a Big Bang launch, we implemented through pilots and learning loops. One claims division went live with the new model in 90 days, supported by coaching, OKRs/ KPIs, and embedded Agile teams. Success was celebrated with promotions, which encouraged wider adoption.
This transformation laid the foundation for improved customer experience, faster time-to-market, and scalable delivery. Results in 6 months:
- 15% increase in NPS
- 25% faster claims cycle time
- Leadership reported higher confidence in their ability to adapt to regulatory changes
What made it work? We didn’t “deploy” a ready-made TOM. We established the foundation pillars, and co-created it by showing how it made work easier, faster, and more meaningful.
Who Orchestrates the TOM?
One question I get often: “Whose job is it to drive the TOM?”
The truth? It’s a shared responsibility. Yes, executives sponsor the vision but successful implementation depends on alignment across:
- Executive leadership – to set direction and fund the transformation. This involves roles such as, CEO, COO, CFO, Chief Strategy Officer.
- Transformation/strategy teams – to orchestrate and align across silos. This is owned by roles such as, Head of Transformation, Strategy, Enterprise PMO.
- Functional leaders – to make changes real in operations, technology, and customer service. This is owned by roles such as, Operations, Technology, Product, HR Leaders, CIO, CTO, Architects.
- HR & change teams – to ensure people, skills, and culture evolve with the model. This involves roles such as, HR, Change Managers.
- Delivery teams – to bring the model to life iteratively and visibly. This is owned by roles such as, Agile Teams, RTEs, Product Managers.
When these groups move together, the TOM isn’t just a blueprint it becomes the ways of working.
Key Takeaways
A TOM isn’t just a operating framework, it’s a commitment to aligning how your organisation works with what it wants to achieve.
💡 Don’t over design, start small and iterate.
💡 Involve the people doing the work from day one.
💡 Build momentum through early wins.
💡 Use TOM as a storytelling tool to build a shared vision.
A Target Operating Model (TOM) is only as strong as its ability to connect strategy to reality. When leaders co-create, when teams see themselves in the change, that’s when transformation becomes sustainable, not just structural.— Aslam Cader
Are you navigating your own TOM journey? Let’s connect. I’d be happy to share more lessons and hear about yours.
If you are curious to learn where you are in your TOM journey, you can request a copy of the TOM Self-assessment template and roadmap guide here, https://aslamcader.com/target-operating-model-tom
Nice synthesis Aslam Cader. Interesting to see how each firm choreographs TOM differently, even when the principles overlap.
Brilliant piece, Aslam. Clear, pragmatic, and refreshingly human. I couldn’t agree more: most models collapse under their own intellectual weight long before the ink is dry. Too often, they’re designed in splendid isolation, with enough swimlanes to drown in, but no clarity on who actually decides what when things get messy. You nailed the key: it’s not just about structure, but story. A great TOM makes the future feel doable, not just deliverable. If people can’t see themselves in it, they won’t move with it. When governance becomes a game of RAG ping-pong, the only green lights are the ones people invent to end the meeting. Loved the emphasis on value streams, behavioural change, and real deployment muscle. More of this, less PowerPoint theatre. Where do you see the biggest blind spot: decision-rights, cultural fit, or the myth that TOMs are one-and-done?
Insightful post, Aslam. A well-executed TOM really is where strategy meets scalable delivery. How do you balance people-first change with process, especially under time pressure?
This is it - that bit about strategy execution across people, process, data, and technology really hits home. It's mental how many brilliant strategies fall apart because someone missed one of those pillars, isn't it? Thanks for breaking this down so clearly, Aslam Cader.