Location is one of the spaces on the Operating Model Canvas. But I have not blogged about locations at any point. This is partly because the topic is pretty self explanatory, and partly because I have found other parts of the operating model puzzle more interesting. So let me say something about locations.
First, location is important. Should you locate near customers or near suppliers or in a low cost country or where there are skilled employees or ….? These are big operating model issues and the right answer is changing due to digital technologies.
But location is not just about which countries to be in. It is also about which cities or towns in a country to locate in. It is also about the type of buildings that are needed for the work and the people who do the work. And it gets more detailed than that. Location can be about factory floor plans. It can be about which departments are on the top floor of an office building and which on the ground floor. It can be about open plan or cubicles or partitions. Mars is famous for its open plan even for the CEO and CFO. Zara is famous for locating its Product Managers in the middle of an open plan space with the design teams located around the outside of the space. This helps easy communication between designers and product managers, who know what is selling in the market.
So location has many dimensions.
Second, location is important because it is frequently connected with big spending: the land, the buildings, the equipment, etc. When doing a business case for an operating model change, the locations costs are frequently a significant element.
Third, location is often a major constraint on operating model work because of legacy buildings and employees with deep location roots. The best operating model is not always possible because of buildings or people.
Fourth there is little guidance on what should be included in a locations footprint chart. Clearly it should visually communicate the locations through a map or a floor plan. But what other information should be on the chart? Here is a list of items to consider:
- type of work carried out in the location
- number of people in the location
- logic for the location (which could be “legacy”)
- information about the buildings and other assets at the location
- important connections between locations
Please suggest some more items that you may have seen on a locations footprint.
Fifth there are few tools that I am aware of for helping you think about locations. In different industries, there are industry specific tools. So a supermarket company will have extensive tooling for identifying the best locations for its supermarkets. However, it terms of generic tools, there are none. As a result, I have developed a stakeholder tool for thinking about location (see exhibit). This needs some work – but is a helpful starting point. It is possible to take any activity or any asset and use the tool to consider whether there is a stakeholder logic for positioning that activity or asset in one location or another.