The Boston Consulting Group recently produced a report on the asset management industry.   The report has all sorts of insights about this industry, but it also has interesting material on BCG’s approach to operating model thinking.  I include a couple of BCG’s exhibits below.

This first one lists the 12 elements of an operating model that BCG thinks are important.  I am always interested in how other academics and consultants think about this issue, partly to see if I have missed anything, partly to see if they have missed anything and partly to challenge my own thinking about the relative importance of different aspects.   For example, BCG has an item “coaching and enablment” that is rather unusual and intriguing.   So I must try to find out more about their thinking on this …. you will be the first to hear if I find out anything!

I also find their grouping of some items under “work structure” is unusual.  Footprint is I think the equivalent of my “locations and buildings”.  The shared services issue, which is important, comes under my organisation modeling tool that also deals with structure.  I am not sure what is meant by “workload balancing”.  Another topic I need to follow up on.

I quite like the idea of putting processes and technology together because they are often highly intertwined: many processes are being delivered by technology.  But I am not sure about having “process redesign” as one of the twelve elements of an operating model.  Feels to me more part of the process of designing an operating model.

The way you think about an operating model influences the factors you focus on and the way you analyse.  So it is an important factor – as can be seen by their next exhibit

The issues that BCG have chosen to focus on are influenced by their belief that asset management activities can be usefully divided into front office, middle and back office and data, as well as by their split between processes, work structure and organisation.

My experience tells me that you need to develop these frameworks to suit the situation rather than use a standard framework for every situation.   Since the framework biases your thinking, you are better with one that emerges out of the situation than one that you impose on it.  This means that you should have your own starting framework, like my PILOS model,  but be enough aware of the many other frameworks that exist to be able to tailor one for the situation you are in.  This is definitely a black belt skill rather than a beginner’s skill; but I do meet very experienced people who insist on arguing that there model is best.

Finally BCG offer some alternative types of operating models.   I like the intention here.  It is really useful to have some archetypes to help you think about the situation.  But I don’t find these easy to get my mind around or understand the differences.   I would encourage anyone designing a TOM to do this thinking – lay out some of the alternatives – just as you would when doing an organisation structure project.  But note that this is not easy work – especially when trying to communicate with others not involved in developing the alternatives.