LA Global Institute Transformation guide · By LA Strategy Institute · Published October 22, 2026 · Updated October 22, 2026
A target operating model is the written description of how an organization will work after a planned change, on six dimensions: customers and value, processes, people and structure, technology and data, governance, and measurement. This guide gives the definition, the six dimensions with a published source for each, four levels to describe them, a five-step design order with an owner and an output per step, a worked example, and a current-versus-target grid that runs in the browser and stores nothing.
Short answers
The strategy says where the organization is going. The target operating model says how it will run when it gets there. Funding a transformation without one means paying for a destination nobody has drawn.
A target operating model (TOM) is the written description of how an organization will work after a planned change: who serves which customers, how the work flows, which teams and roles do it, which systems and data carry it, who decides what, and how performance is measured. It is the “to be” version of the operating model. The current operating model is the “as is” version. The difference between the two is the transformation.
Every organization has an operating model, written down or not: it is how the place actually runs today. Bain defines an operating model as “the blueprint that defines how a company’s structure, accountabilities, governance, ways of working, and capabilities are configured to execute its strategy.” A target operating model is the same blueprint drawn for a future date, after the strategy has been chosen.
Operating model design is the work of choosing the target, dimension by dimension, from the strategy rather than from today’s habits. It describes the current state on each dimension, sets the target level the strategy needs, keeps the dimensions that already fit, and turns the gaps into a roadmap with owners and dates. The five steps and the grid on this page are that work in order.
Searchers ask for three principles, and the results page usually answers with “people, process, technology,” which is a list of parts, not principles. The three rules this page works by are its own: the model follows the strategy, never the org chart; change only the dimensions the strategy requires, and write down the ones you keep; and every dimension that moves gets one owner and one measure.
A different thing with the same name. The Border Target Operating Model is a UK government programme, published by the Cabinet Office on 29 August 2023, setting out the final plans for a new approach to importing goods into Great Britain, introduced progressively from the end of January 2024. If that is what you searched for, the gov.uk publication linked under Sources is the primary source.
The numbers
Each figure links to the page it was read from. Three are from a 2014 McKinsey survey and are dated as such; nothing here is a client result, and no failure rate is quoted without its source.
of companies are sustained value creators, with profits above their cost of capital and real top-line growth over most of a 10-year period.
Bain & Company, 2026of respondents in the same Bain research say the barrier is not a lack of strategy, ideas, or opportunities: their organization is holding them back.
Bain & Company, 2026or more: how far companies with effective operating models outperform competitors in total revenue growth, EBIT growth, and shareholder returns, per Bain.
Bain & Company, 2026of their strategies’ full potential is all that even top-performing companies achieve, due in no small part to shortcomings in their operating models.
McKinsey, 2025of executives had experienced an organizational redesign at their current company; 70% of those within the previous two years.
McKinsey Global Survey, 2014of executives personally involved in a redesign called it a success: fully implemented, objectives met, performance improved.
McKinsey Global Survey, 2014nearly: the share of fully implemented redesigns that took more than 12 months. An average redesign targeted 5.5 organizational elements.
McKinsey Global Survey, 2014Six dimensions
Published frameworks slice the model differently. OC&C's deck uses six dimensions: strategy and leadership, governance, employees and talent, organisational structure, process and service delivery, and systems and technology as the enabler (OC&C, Target Operating Model, October 2024). The Operating Model Canvas uses POLISM: processes, organization, locations, information, suppliers, and management systems (operatingmodelcanvas.com). Bain uses structure, teams and accountabilities; management system; leadership and culture; talent engine; business processes; and technology and data (Bain, 2026). The six below are LA Strategy Institute's own grouping, in the words its transformation page already uses. Each one says which published dimensions it covers and what “done” looks like.
Who the organization serves, what it delivers to them, and how the customer experiences it.
OC&C: strategy and leadership. Operating Model Canvas: the value proposition the canvas is built around.
How work flows from request to delivery, who does what and when, and what is done in-house, by partners, or in which location.
OC&C: process and service delivery. Canvas: processes, locations, suppliers. Bain: business processes.
Which teams and roles exist, how they are grouped and sized, what skills they need, and how those skills are built.
OC&C: employees and talent; organizational structure. Canvas: organization. Bain: structure, teams and accountabilities; talent engine.
Which systems and data support the work, how they connect, and what people still enter or look up by hand.
OC&C: systems and technology (the enabler). Canvas: information. Bain: technology and data.
Who decides what, how priorities and budgets are set, and how the center and the units divide responsibility.
OC&C: governance; role of the corporate headquarter. Canvas: management systems. Bain: management system.
Which measures tell leadership the model is working, how performance is reviewed, and how the model itself is kept current.
OC&C: strategy and leadership (performance culture). Canvas: management systems. Bain: management system; leadership and culture.
Four levels
A target operating model is only useful if the current one is described on the same scale, so the gap can be read. The four levels below are this page's working scale for a first leadership conversation, not a validated maturity model.
No agreed way of working. The result depends on which person handles it.
Written down and known, but applied unevenly from team to team.
Applied the same way everywhere and measured.
Measured, reviewed on a cycle, and improved; a strength the strategy can lean on.
The method
The order follows OC&C's four phases (strategic guiderails and status quo; TOM design and business case; detailing; road mapping), with the target-setting step split out because it is where the grid is filled in. OC&C's own framing is to slice the elephant: not everything changes at once, and not every dimension has to change.
Owner: the chief executive with the leadership team. Output: one page of guiderails (what the strategy requires, what is out of bounds, what is prioritized) and a description of today’s operating model on all six dimensions, with its pain points. OC&C’s phase 1 includes a market scan here; LA Strategy Institute’s Market Opportunity Audit covers the same ground.
Owner: one named executive per dimension. Output: the current-versus-target grid, filled in. For each dimension, the level it runs at today and the level the strategy needs. Some rows will not move; write those down as decisions. OC&C’s own guidance is that not every dimension has to be adjusted, and the assessment can justify keeping the status quo.
Owner: the transformation lead, with the dimension owners. Output: for each moving dimension, what the target looks like in practice (key processes, organizational elements, responsibilities, capabilities), a benchmark against the best model you can find, and a business case that names the value drivers, the saving potential and when each effect lands. OC&C’s phase 2.
Owner: the people who will run each process. Output: process and responsibility detail for the dimensions that move most. OC&C treats detailing as a phase that is run only if necessary or wished for, and notes that TOM projects can comprise phases 1, 2 and 4 alone. A target that runs past about a hundred pages has become a manual rather than a model, in the Operating Model Canvas authors’ phrase.
Owner: the transformation lead; the chief executive signs it. Output: a sequenced roadmap with milestones, responsibilities, stakeholders, the capability build-up and early quick wins, plus the measure per dimension that will show the model is working. OC&C’s phase 4, which starts as a high-level roadmap after phase 2 and is completed once detailing ends.
The current-versus-target grid
Six dimensions, two columns. For each one, pick the level that describes today and the level the target needs. The table shows which dimensions have to move, by how much, and which can stay. Write the owners on the printed copy; nothing you select here is saved or sent.
Worked example
An illustrative firm with several branches, each running its own scheduling, invoicing and complaints by email, decides to pool that work in one shared operations center and keep the on-site work in the branches. This is a teaching example, not a client case. Load it into the grid to see the same gap view there.
| Dimension | Today | Target | Step | Owner |
|---|---|---|---|---|
| Customers and value | 2 Defined | 3 Managed | +1 | Chief operating officer |
| Processes and service delivery | 1 Ad hoc | 3 Managed | +2 | Head of operations |
| People, roles and structure | 2 Defined | 3 Managed | +1 | Head of people |
| Technology, data and information | 1 Ad hoc | 3 Managed | +2 | IT lead |
| Governance and decision rights | 3 Managed | 3 Managed | 0 | Chief executive |
| Measurement and management system | 1 Ad hoc | 2 Defined | +1 | Finance lead |
Today. Each branch sets its own service standard; a customer served by two branches notices the difference.
Target. One service promise for every branch, with the customer-facing steps the same everywhere and measured.
Today. Scheduling, invoicing and complaints are handled differently in each branch, mostly by email.
Target. Scheduling, invoicing and complaints run from one shared operations center; branches keep the on-site work.
Today. Branch managers run everything, and every branch carries its own back-office roles.
Target. Branch managers lead field teams; back-office roles are pooled in the center with defined skills and career paths.
Today. Three scheduling tools and a spreadsheet per branch; customer records are kept per branch.
Target. One scheduling and billing system and one customer record, with the branches reading from it.
Today. Pricing bands and hiring plans are already set centrally, and branch managers decide within them.
Target. No change. This dimension stays as it is, which is a design decision, not an omission.
Today. Monthly revenue per branch is the only number every branch reports the same way.
Target. Service time, first-time fix rate and cost per job defined once and reported weekly for every branch and the center.
Reading the table: processes and technology move two levels each, so the roadmap starts there, with the head of operations and the IT lead as owners. Governance stays at level 3 by decision. Measurement moves one level only, because defining three numbers once and reporting them weekly is a smaller change than a shared center, but it is the change that proves the others worked.
Five terms that get confused
Most disagreements in a design workshop are about words. Settle these five before the first dimension is discussed.
How the organization will work after the change, across all six dimensions, written for a future date. The subject of this page.
How the organization works today, written down or not. The target operating model is the same description for the future state; the two are compared dimension by dimension to find the gaps.
One dimension of the operating model, not the whole thing: which teams and roles exist, how they are grouped and sized, and who reports to whom. A new structure with the same processes, systems and decision rights is a reorganization, not a new operating model.
What the organization sells, to whom, and how it makes money. The business model sets the value proposition; the operating model is how the organization delivers it. OC&C’s deck starts from business-model elements and derives the operating model from them.
A one-page tool for a high-level operating model, built around POLISM: processes, organization, locations, information, suppliers, and management systems. Its authors use it for both the “as is” and the “to be” model, at one to ten pages rather than a hundred.
How to know it is done
None of the pages ranking for this search say how to tell the model is complete. The test is simple: for each of the six dimensions, can leadership point to the thing below? If a dimension cannot be measured, its target was a sentence, not a design.
Before the roadmap is funded, score the same change with the change readiness assessment, and map what each moving dimension does to each group's working day with the change impact assessment. The target says where the organization is going; those two say whether it can get there on the date.
Operating model consulting
Operating model consulting is worth paying for when the leadership team cannot agree on the target levels, when the current model has never been described honestly, or when the business case has to survive a board. The four jobs below are the ones to ask any consultant to do. At LA Strategy Institute, the first engagement is a bounded Market Opportunity Audit, not an open-ended transformation promise; what follows the audit is scoped after it, not before.
Before any design work, confirm what the market will pay for, what the organization actually does today, what the public surface shows, and which constraints are fixed. At LA Strategy Institute that is the Market Opportunity Audit: a bounded first engagement that verifies the market, public surface, operating reality, and constraints before recommending investment.
Translate the strategy into target levels on the operating model, technology, people, governance, customer experience and measurement, which is how the organizational transformation consulting page describes the connection leadership has to make.
Run the grid with the people who own the work, challenge targets that came from habit rather than strategy, and leave the decision rights with the leadership team. A consultant who owns the model owns the organization’s excuse when it is not run.
Leave behind the measure per dimension and a review date, so the model is kept current by the organization and not by the next engagement. What follows the audit is scoped after it, not before.
Source boundary
OC&C Strategy Consultants' Target Operating Model deck (October 2024) supplied the six TOM dimensions, the rule that not every dimension has to change, and the four phases. The Operating Model Canvas site, by Andrew Campbell, Mikel Gutierrez and Mark Lancelott, supplied POLISM and the one-to-ten-pages rule. Bain & Company's Winning Operating Models That Convert Strategy to Results (2026) supplied the operating model definition, its six dimensions and three of the figures. McKinsey's explainer What is an operating model? (November 2025) supplied the 70 percent figure and the twelve Organize to Value elements; McKinsey's 2014 Global Survey on organizational redesigns supplied the remaining three figures. The UK Cabinet Office publication supplied the Border Target Operating Model facts. The six dimensions used here, the four levels, the five steps, the grid, the stop rules and the regional services example are LA Strategy Institute's own. None of those authors or organizations created, reviewed, or endorsed this page.
Questions leadership teams ask
TOM stands for target operating model: the description of how an organization will work after a planned change, as opposed to the current operating model, which is how it works today.
A framework is a fixed list of dimensions to design against. Three published ones are credited on this page: OC&C’s six TOM dimensions, Bain’s six operating model dimensions, and the POLISM list from the Operating Model Canvas. McKinsey’s Organize to Value approach uses twelve elements. The six dimensions used here are LA Strategy Institute’s own grouping, chosen to match the words on its transformation page.
The grid on this page is one, with no download, sign-up, or account: six dimensions, a today level and a target level for each, the step between them, and a blank owner column on the printed copy. Nothing you select is saved or sent. It is kept to one page on purpose, following the Operating Model Canvas authors’ rule that a high-level model is one to ten pages.
There is no standard duration, and this page does not invent one. The only published timing figure cited here is McKinsey’s 2014 survey finding that nearly 30% of fully implemented redesigns lasted more than 12 months, which measures the whole redesign, not the design of the target.
As a teaching example, yes; as a target, no. The regional services firm on this page shows what a filled-in grid looks like and how to read it. Your target levels come from your strategy, which is why the grid starts empty and the example is loaded on request.