Why is unpacking your operating model a key to strategy success?

As Boards and executive teams commence their 2026 Quarter 1 planning, the critical focus must shift from simply finalising what the strategy is to deeply scrutinising and designing how it will be executed. This is no longer a secondary consideration; it has become the key differentiator for success.

This urgency is amplified by the current regulatory and economic climate, which now places an unprecedented emphasis on accountability and agility. New legislation and intensified stakeholder scrutiny are integrating this focus into governance structures, meaning that effective strategy execution is now fundamentally and demonstrably determined by the organisation’s Operating Model.

The Operating Model serves as the enterprise’s foundational blueprint—the structural and procedural logic for how the organisation is designed to systematically create, deliver, and capture value. This model must be inherently resilient, engineered to dynamically respond to a set of volatile external drivers of success.

The effectiveness and integrity of the Operating Model, therefore, are not merely administrative concerns; they become the single most critical determinant for achieving strategic success amidst these profound external pressures and the heightened scrutiny from regulators, investors, and the public. A well-designed and consistently implemented Operating Model is the invisible architecture that ensures that every resource, process, and person is strategically aligned and working coherently towards the defined strategic goals. It answers fundamental questions such as:

• Structure: Are our organisational units and reporting lines optimised for speed and collaboration, or do they create silos?
• Process: Are our core value-delivery processes (e.g., innovation, production, service delivery) efficient, repeatable, and scalable?
• People: Do we have the right capabilities, culture, and incentives in the right places?
• Technology: Is our technology stack enabling our strategy, or is it a source of complexity and delay?
• Governance: Are our decision-making rights clear, driving accountability and rapid course correction?

Conversely, misalignment in any one part of the model—such as outdated processes, conflicting metrics, or a misallocation of talent—can lead to systemic friction, wasted capital and human resources, a loss of market responsiveness, and ultimately, a failure to realise strategic ambitions, regardless of how brilliant the strategy itself may be. The 2026 Q1 planning cycle is the moment to stress-test and fortify this blueprint.

What is an operating model?

An operating model is the backbone of any organisation. It outlines how the company delivers value to its customers, operates on a day-to-day basis, and achieves its strategic objectives.

The following 12 elements (Ref Nov 2025- McKinsey Explainer) provide a comprehensive framework for assessing your organisation’s readiness for Q1 execution. Boards should challenge executive teams on the current state of alignment across these elements.

The Critical Link: Operating Model and Strategy Execution

Strategy is an aspiration; the Operating Model is the mechanism for making it real. Entering Q1 with a high-level strategy but a misaligned Operating Model is a recipe for execution failure.Addressing Key Misalignments

For Q1 planning, executives should specifically review potential misalignments:

Final Thoughts

Strategy execution is not a separate phase of planning; it is the ultimate test of the Operating Model’s fitness. As you finalise Q1 plans, use the 12 elements to conduct a rigorous self-assessment. An aligned Operating Model is not merely an operational efficiency tool—it is the fundamental engine that converts strategic intent into tangible results. Ensuring this alignment is the most valuable contribution a Board can make to Q1 success.

The rigorous examination of these 12 elements requires deep, honest conversation and focused attention from your top team—time that is often consumed by managing the logistics and flow of the planning session itself. Engaging external, experienced facilitation is the most effective way to ensure executives can fully participate in the critical discussion and unpacking of the 12 elements, rather than coordinating the workshop. This allows your team to focus exclusively on achieving the alignment necessary to maximise performance.

To structure this essential discussion and drive performance, reach out to me to book your Q1 Operating Model alignment workshop.

Cynthia Payne

Email | cynthiapayne@anchorexcellence.com

Founder and Managing Director, Anchor Excellence | 30+ years in executive leadershipCynthia is the CEO of Anchor Excellence and aged care leader specialising in governance, compliance, and operational excellence.