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New operating models for a new world: A leader’s guide

Leading Off

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Leading Off

Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

Is your organization designed to meet the challenges of a more turbulent world? The right operating model enables companies to realize the full value of their corporate strategy, but developing that model is a complex, rapidly evolving process. By reimagining the ways their organizations work with value in mind (what we’re calling the “Organize to Value” approach), companies can create effective operating models that translate their strategic potential into strong performance. This week, we look at the essential elements of a modern operating model and how leaders can design their organizations for success.
An image linking to the web page “A new operating model for a new world” on McKinsey.com.

With geopolitical, technological, and societal forces changing so quickly, the classic approach to operating model design—which was established during more stable times—needs a major upgrade. McKinsey Senior Partners Alexis Krivkovich, Amadeo Di Lodovico, Brooke Weddle, and Dana Maor and their coauthors have developed a dynamic new system for operating model design. The 12 core elements of the Organize to Value system (such as purpose, talent, rewards, and technology, including the scaling of AI and automation) can be tailored to an organization’s circumstances and goals. The authors note that an operating model redesign should start with leaders identifying the root causes of why their strategies have not translated into peak performance and then crafting a plan to lead the company through deep change. “Ultimately, a fit-for-purpose operating model that maximizes value creation enables CEOs to achieve four measurable outcomes—clarity, speed, skills, and commitment,” they say.
An image linking to the web page “Author Talks: Are your employees happy at work?” on McKinsey.com.

Creating a healthy culture is an important element of developing a strong operating model. But many managers are not prioritizing workplace well-being even though they recognize that it can boost business performance, Jan-Emmanuel De Neve, director of the Wellbeing Research Centre at the University of Oxford, says in a McKinsey Author Talks interview. “There is a big discrepancy between walking the walk and talking the talk,” says De Neve, coauthor of Why Workplace Wellbeing Matters: The Science Behind Employee Happiness and Organizational Performance. He notes that it’s vital for employees to feel like they are treated as human beings, to have friends at work, and to understand the impact of their work on the organization and on others. “All of these things come together in a sense of a culture of belonging, and you cannot underestimate the importance of that,” he says.
An image linking to the web page “The new rules for getting your operating model redesign right” on McKinsey.com.

Even “golden rules” can use a refresh in today’s volatile business environment. That’s why McKinsey’s Brooke Weddle, Deepak Mahadevan, Elizabeth Mygatt, J. R. Maxwell, Olli Salo, and Tristan Allen have updated the core principles that guide operating model redesigns. This change reflects how four of McKinsey’s decade-old “nine golden rules” for redesigns have evolved—namely, the greater importance of top team alignment, leadership incentives, upskilling people managers, and the redesign team’s talent and skills, all of which can increase value. The authors find that 97 percent of organizations using all nine refreshed rules will achieve successful redesigns, compared with 59 percent of those that use all nine of the original rules. They also note that companies are now pursuing redesigns to improve efficiency, refocus on growth, execute on their strategy, and increase their agility and speed. “Organizations are no longer simply looking to tweak their structures—they are seeking to build leaner, more adaptable systems that can thrive in the face of uncertainty and disruption,” the authors say.

Lead by designing an effective operating model.

— Edited by Eric Quiñones, senior editor, New Jersey

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:39 - 14 Jul 2025