Research Paper June 2025-Target Operating Models as Living Operating Architectures
Weaving Structure, Leadership, and Energy into Organisational Flow
MSc Student Name: Claire Taylor – June 2025
Section 1. Introduction – Reframing the Question
In a time when complexity has become the new normal and transformation fatigue hums through every corridor of the modern organisation, the idea of a Target Operating Model (TOM) presents botha promise and a paradox. It promises clarity, coherence, and delivery— yet too often delivers disconnection, inertia, and ungrounded optimism.
A TOM—Target Operating Model—is the organisational architecture that defines how value is delivered day-to-day: how people, processes, systems, and purpose interrelate. It is intended tobring focus and flow. But in practice, it is frequently treated as a fixed blueprint to be deployed rather than a dynamic pattern to be sensed, shaped, and sustained.
Recent studies by Bain & Company and McKinsey reveal a troubling pattern: while over 80% oflarge-scale transformations define a TOM at the outset, fewer than 30% deliver sustained impact. This does not point to a failure of the idea—but to how it is understood, enacted, and embodied.
This paper does not critique TOMs from the outside. It enters the conversation from within—through the lens of SJG Global Consulting—and invites a deeper question:
What makes some operating models breathe while others break?
Across sectors—from fast-growth scale-ups to legacy institutions and public service reform—a pattern is emerging. Transformations falter not because the frameworks are flawed, but because the approach is fragmented. As Deloitte notes in their 2024 Human Capital Trends report, “manyorganisations design change efforts for efficiency rather than resilience, failing to equip people to navigate uncertainty or reimagine value creation.”
The technical changes are not matched by relational coherence. Structure is redesigned, but energy is not renewed. Systems are reshaped, but the leadership consciousness required to hold them remains unchanged.
At SJG, we believe that the TOM must move beyond structural engineering into systemic coherence.We treat transformation not as a project to deliver, but as a developmental field to steward.
This paper offers a new lens—rooted in systems thinking, adult development, and organisationaldesign—on how operating models can become living architectures. It introduces a three-pillar model grounded in:
· Target Operating Model design as a conscious act of structuring for value flow
· Leadership Development as the internal architecture needed to hold systemic change
· Continuous Improvement as the rhythm of learning that animates the whole.
These are not discrete domains, but interwoven dimensions. Together, they form the backbone of what we call a living operating model—one that is both structured and sentient.
Accenture’s recent “Organising for the Future” research reinforces this framing: high- performingcompanies are 3.5x more likely to integrate TOM clarity, leadership maturity, and continuous learning into one coherent model.
This is not a playbook. It is a provocation.
· A call to shift from control to coherence.
· From rollout to resonance.
· From operating model as a structure to operating model as a sensing field.
To sense where the system is alive. Where it is stuck. And what it is becoming.
Section 2. Why Target Operating Models Fail – A Systems View
Organisations rarely set out todesign operating models that fail.Yet, many transformation efforts fall short of their ambitions—not through malice or miscalculation, but through mismatch: between vision and capability, structure and culture, or strategy and system maturity.
In global research conducted across sectors—from private equity-backed growth companies to public sector reform programmes—the failure patterns of TOMs reveal not isolated incidents, but systemic tendencies. These failures are not just technical missteps. They are developmental symptoms—signs that the organisation is trying to become something it has not yet built the inner architecture to hold.
McKinsey’s 2023 Strategy Execution Survey found that only 28% of organisations felt confident thattheir operating model aligned with their strategic intent. Similarly, Bain & Company highlights thatTOMs often reflect a static, top-down approach that misses the emergent nature of value delivery in modern systems.
As organisational theorist Peter Senge noted, “Today’s problems come from yesterday’s solutions.”The operating model is not just a solution—it is a mirror. And when it breaks down, it tells ussomething about how the organisation is seeing, sensing, and acting in complexity.
This section draws from academic literature, consulting insights, and practice-based wisdom to surface the five interwoven breakdowns at the heart of TOM failure.
2.1 Design Without Dialogue
A frequent and foundational failure is the absence of real dialogue in design. Operating models areoften constructed by a small group of strategists or external consultants, using frameworks detached from the lived experience of those delivering the value.
This creates a false separation between design and delivery. Employees are expected to “buy in” tosomething they never helped shape. But as Otto Scharmer’s Theory U reminds us,— deep change begins with co-sensing a shared awareness of the current reality and emergent future. When TOMs are built without this shared sensing, they are cognitively intelligent but emotionally inert. They don’t land because they don’t listen.
This is compounded by the myth that good design equals good results. In truth, design is only as effective as its resonance with the system it seeks to change.
Without this relational grounding, TOMs may be structurally elegant but emotionally inert. Deloitteemphasises that the failure to engage frontline teams early reduces commitment, slows adoption, and weakens resilience. Design must emerge from dialogue, not be imposed from above.
2.2 Leadership Maturity Mismatch
Most TOMs require a new way of leading—but rarely provide the developmental infrastructure to support it. The organisation introduces new operating rhythms, governance forums, or agileworkflows, yet the leadership behaviours remain rooted in command, control, or consensus.
Drawing on Bill Torbert’s Action Logics and Robert Kegan’s Stages of Adult Development, we see a clear tension: operating models designed for high-complexity, adaptive systems require leaders operating at a post-conventional level of maturity—able to hold paradox, foster generative dialogue, and invite emergence.
When leaders remain at the Expert or Achiever stage—valuing control, predictability, and linearresults—they unconsciously resist the very system they are tasked with stewarding.
This is not a criticism of leaders, but a call to develop them. TOMs succeed not through structural installation, but through leadership transformation.
As Robert Kegan and Bill Torbert argue, adaptive systems require post-conventional leaders—those who can hold paradox, lead through inquiry, and sense systemic patterns. Without a parallel investment in leadership development, TOMs are filled with outdated mental models.
KPMG’s 2023 Global Transformation Study reinforces this: only 31% of leaders feel confident inleading through ambiguity and emergent change. The structure may be new, but the consciousness leading it is not.
2.3 Absence of Operating Rhythm
Change initiatives often falter not in design but in sustainment. Continuous improvement (CI) is referenced in theory but rarely embedded in rhythm. Without feedback loops, operating models ossify. They become static artefacts in an ever-shifting world.
W. Edwards Deming’s Plan-Do-Check-Act (PDCA) cycle and the Toyota Production System’s principle of Kaizen remind us that improvement is not a task—it is a way of being. Yet many TOMs are launched without the rituals, roles, and forums that would allow them to evolve. They are declared “done” far too early.
A CI ecosystem is not just about metrics and retrospectives—it is about learning. Without a learningsystem, the TOM becomes brittle. It cannot metabolise feedback, adjust course, or renew itself.
Drawing on W. Edwards Deming’s PDCA cycle and Toyota’s Kaizen philosophy, effective models institutionalise learning loops. Accenture’s research finds that organisations with embedded CIrhythms are 2.8x more likely to sustain transformation benefits. CI is not just an add-on—it is the organisational breath that keeps the model alive.
2.4 Fragmented Implementation Across Silos
In theory, the TOM is the blueprint for how value flows across the organisation. In practice, it often becomes a disjointed rollout, delivered piecemeal across functions, geographies, or business units.Agile in tech. Lean in ops. OKRs in strategy. Yet no shared frame connects the parts.
This creates what sociologist Charles Hampden-Turner called “competing logics”—different mental models operating in tension. Employees experience confusion, duplication, or overload. Leaders struggle to navigate between methodologies. The transformation feels chaotic, even when the vision is clear.
Fragmentation is not just a failure of coordination—it’s a failure of integration. And integration is not a project management task. It is a leadership capability.
Integration is not a project management task; it is a leadership capability. Leaders must hold the whole system, create cross-boundary coherence, and act as translators between logics.
2.5 Misalignment Between Strategy and Culture
Perhaps the most intractable failure occurs when the TOM strategy assumes a cultural context thatdoes not exist. The new model may be designed for innovation, speed, and autonomy—yet the prevailing culture is hierarchical, compliance-driven, or risk-averse.
In Diagnosing and Changing Organisational Culture, Cameron and Quinn argue that “strategy iseasy; culture is hard.” Many organisations underestimate the cultural rewiring needed to support new ways of working. And without cultural readiness, TOMs become surface-level exercises—reorganisations without transformation.
Culture is not the “soft stuff.” It is the operating system beneath the operating model. If we do not align the two, the deeper system will always win.
EY’s 2023 Culture and Transformation Report finds that organisations with strong cultural alignment are 4x more likely to see TOM adoption succeed. Culture is not soft—it is the operating system beneath the operating model.
2.6 The Deeper Pattern: A Call to Integration
These five fault lines are not discrete. They are systemic. They point to a deeper insight: TOMs fail when they are designed as endpoints rather than entry points.
To succeed, the TOM must be understood not as a blueprint to implement, but a mirror to inquire through—a living conversation between value, structure, culture, and leadership.
When that conversation is held with depth, curiosity, and coherence, transformation becomes not only possible—but inevitable.
Section 3. Theoretical Foundations of Conscious Organisational Transformation
To transform an organisation is not simply to redesign it — it is to rewire the very logic by which it functions, relates, and evolves. While structures and frameworks are necessary, they are not sufficient. Deep transformation requires theoretical grounding — not to add complexity, but tocreate clarity of why certain interventions matter, how systems change, and what conditions allow lasting change to emerge.
This section outlines the key theoretical lenses that underpin SJG’s approach to designing TargetOperating Models, leadership development, and continuous improvement. It draws on systemstheory, adult development, organisational psychology, and lean thinking and is cross-referenced with key industry research from leading global consultancies.
3.1 Systems Theory: Seeing the Whole
As pioneers such as Donella Meadows and Peter Senge have shown, organisations behave morelike ecosystems than machines. Yet many operating models are still designed in silos
— ignoring the relational nature of work and the ripple effects of structural change. Consultancy research supports this. According to McKinsey (2021):
“large-scale transformations fail, primarily due to a lack of systems thinking and alignment across functions.”
Deloitte (2022) echoes this in their “Future of the Enterprise” report:
“Organisations that adopt systems-based operating models are 3x more likely to outperform financially, particularly during disruption.”
SJG integrates systems thinking into TOM design, ensuring that operating models are not only efficient but also coherent — alive to the interconnections that drive performance, culture, and adaptability.
3.2 Adult Development and Vertical Leadership Growth
A growing body of evidence shows that organisational success is tied to the depth of leadership consciousness — not just its functional capability.
Kegan and Lahey (Harvard) have shown that fewer than 20% of executives operate at meaning-making levels sufficient to hold systemic complexity. Meanwhile, Torbert’s Action Inquiry research links vertical leadership maturity to higher innovation, stakeholder trust, and ethical decision-making.
This is reinforced by Accenture’s Human + Machine research:
“Future-ready organisations are distinguished by leaders who can bridge intuition, technology, and human systems — not just execute process.”
SJG places vertical development at the core of transformation — supporting leaders to grow not just in skill, but in perspective, presence, and inner clarity. Without this, even the best- designed operating models fall short.
3.3 Change Management Theory: From Buy-in to Belonging
Traditional change methods such as Kotter’s 8 Steps, Lewin’s model, or Prosci ADKAR are stillwidely referenced, and rightly so. But even consultancies are beginning to question their limits in modern contexts.
Bain & Company (2023) reports:
“70% of organisations over-invest in change communications and under-invest in cultural adaptation and leadership modelling.”
EY’s People-Centric Transformation framework finds that:
“Transformations are 4.2x more successful when employees co-create change rather than receive it.”
SJG draws from these models — but extends them by placing emphasis on co-creation, reflection, and conscious ownership. Transformation isn’t something we “roll out.” It’s something we invite, enable, and evolve from within.
3.4 Psychological Safety: The Soil of Change
Psychological safety is not just a “nice to have.” It is the core condition for continuous improvement, innovation, and healthy performance, the soil that is the foundation for organisations to grow from.
Amy Edmondson’s foundational research has been echoed in consultancy findings across sectors. For example:
McKinsey (2021):
“Teams with high psychological safety are 27% more likely to deliver above-average performance.”
Deloitte Human Capital Trends (2022):
“Organisations investing in trust-building and safety are seeing a 2.5x higher employee engagement score and 40% higher retention.”
At SJG, we see psychological safety as the starting point — not the end state. It’s what allows a system to breathe, question, and grow.
3.5 Lean Thinking, Agile, and Toyota Production System
Lean and Agile are now standard in most enterprise transformations. Yet consultancies continue to report poor outcomes when these are applied mechanically rather than culturally.
KPMG’s 2022 Global Transformation Study found:
“Only 30% of organisations embedding Agile/Lean realise lasting benefit — primarily due to lack of leadership capability and integration into strategy.”
BCG (2023) adds:
“Continuous Improvement fails when it’s isolated as an operations initiative. It must be embedded in organisational DNA.”
SJG treats CI as a learning rhythm, the breath of the ecosystem, not a process overlay. Our work helps teams build reflective habits and rituals — integrating insight, feedback, and adaptation at every level.
3.6 Integral Thinking: Holding the Whole
Ken Wilber’s Integral Theory provides a helpful map of the terrain. SJG draws on the “four quadrants” to ensure no dimension of change is overlooked.
Individual (Inner)
Collective (Inner)
Mindsets, values, purpose
Culture, meaning, psychological safety
Individual (Outer)
Collective (Outer)
Behaviours, skills, outputs
Systems, Structures. TOM Design
Where most TOMs focus only on systems and behaviours, SJG designs for alignment across all four quadrants — the technical and the emotional, the strategic and the cultural.
3.7 Conclusion: Anchoring the Practice in Proven Theory
In a world flooded with methodologies, it’s easy to mistake surface-level change for real transformation. SJG grounds every engagement in theory — not for jargon, but for rigour.
Our work weaves together:
· Systems thinking (Senge, Capra, Meadows)
· Adult development (Kegan, Torbert)
· Change frameworks (Kotter, Prosci)
· Psychological safety (Edmondson)
· CI philosophy (Lean, Agile, Toyota)
· Integral awareness (Wilber)
All of this forms the invisible architecture that supports sustainable operating models, courageous leadership, and cultures of learning.
The question is not “Do we have the right model?”
The question is: “Is the system ready to become more conscious of itself?”
Section 4. A Living Operating Model – Weaving Structure, Leadership, and Energy Into Organisational Flow
In the lexicon of transformation, Target Operating Model (TOM) has become a container term—widely used, often misunderstood. It is intended to signal readiness, clarity, and architecturalcoherence. Yet, many such models falter not because of poor strategic intent, but because they are imagined as static endpoints rather than evolving ecologies.
What if a TOM was not a blueprint to impose, but a field to tune into—something to sense, shape, and adapt in motion?
This section explores a reframe: that enduring operating models are living architectures, co- created at the intersection of structure, leadership, and energetic flow. These dimensions do not exist in isolation; they form a dynamic ecosystem that pulses beneath the surface of every organisation, whether formally named or not.
4.1 Structure Without Soul
The Limits of Mechanistic Design Operating models traditionally begin with structure—roles, systems, lines of accountability, governance mechanisms. These are tangible, manageable, and visible. They provide the comfort of clarity. Yet, over-reliance on structure can become a liability.
Extensive literature across systems thinking (Capra, 1996), sociotechnical theory (Emery & Trist), and complexity science (Snowden, 2003) reveals that rigid models tend to disintegrate under dynamic pressure. Organisations do not fail because they lack design. They fail because their design resists adaptation.
McKinsey’s 2023 operating model research highlights that 67% of organisations redesign structures without adapting the behavioural norms that must support them, often leading to regression.
Deloitte further underscores the point: “Structure without narrative coherence becomes a scaffold for disengagement.”
In multiple sectors—technology, government, global services—operating models have been observed to revert to silos, even after restructuring. The reason? Structure alone cannot holdcomplexity. It must be animated by human energy, informed by purpose, and held in a state of responsiveness.
Those responsible for TOMs have often found that when structure is designed from abstraction—without contact with lived experience, informal power, or emotional texture— it produces compliance, not commitment. Operating models that last are not engineered from diagrams; they are shaped through dialogue.
4.2 Strategy as Energy - From Direction to Flow
In Lean and Agile paradigms, value streams are promoted as an organising principle: mapping the journey of value creation across functions. While the model is useful, its implementation often misses an underlyingtruth—value is not just a functional flow; itis an energetic one.
Strategy, then, is not a static plan to cascade downward. It is an active sensing of where energy wants to move. In Eastern traditions—whether chi, prana, or qi—energy is understood not as a thing to control, but aforce to harmonise with. Organisationally, this invites a new posture: tuning into the field of emerging priorities, human readiness, and external context.
Accenture’s "Organising for the Future" report (2023) notes that high-performing companies treatstrategy as dynamic orchestration—not annual planning. Similarly, Bain’s operating model research reinforces the need for flow-based models that adapt to signal and demand in real-time.
Methods such as Hoshin Kanri reflect this thinking, where strategy is not handed down but discovered in dialogue, iterated in waves. Planning becomes inquiry, and alignment is a co- created state rather than a compliance metric.
When TOMs are led from this perspective, they begin not with hierarchy but with purpose. They areshaped by sensing where the organisation is alive, where it is blocked, and where it is seeking to evolve.
4.3 Leadership as the Carrier Wave
No operating model outlives the level of consciousness that governs it. Leadership maturity, then, is not a peripheral consideration—it is central.
Developmental theorists such as Torbert, Cook-Greuter, and Kegan have demonstrated that transformational capacity is directly related to a leader’s action logic—their meaning- making lens. Most TOMs assume that leaders will naturally grow into the model’s expectations. But experience shows that many leaders remain in conventional stages: seeking control, resisting feedback, and avoiding ambiguity.
Where operating models succeed, it is often because the leadership context has matured in parallel. Leaders are not simply trained to deliver a change; they are developed to embody it. This includes learning to hold paradox, ask generative questions, engage in reflective inquiry, and sense system-wide patterns beyond departmental concerns.
KPMG’s 2023 Global Transformation Study confirms this developmental requirement: organisations with mature leadership practices are 3.2x more likely to sustain TOM transitions.
In practical terms, this has meant rethinking leadership development not as content delivery, but as identity expansion. Dialogic methods, vertical development labs, action inquiry, and shadow work become tools to help leaders metabolise the complexity of the systems they lead. Leadership, inthis sense, becomes less about control and more about coherence.
4.4 Continuous Improvement as Conscious Practice
Continuous Improvement(CI) is often understood asoperational optimisation—incremental gains, waste reduction, or quality control. While important, this framing is narrow. In its fuller expression, CI is a cultural rhythm: a way of sensing, learning, and evolving that mirrors the learning capacity of the system.
In Japanese philosophy,Kaizen means “changefor better.” But it alsocarries connotations of mindfulness, ritual, and presence. Applied well, CI becomes a tuning mechanism— allowing the organisation to listen to itself, integrate feedback, and pivot with grace.
Accenture’s 2023 survey found that companies with embedded CI behaviours were 2.8x more likelyto achieve sustained operational outcomes and higher employee engagement.
In practice, organisations that thrive on CI do not wait for quarterly reviews to learn. They embedreflection into daily rhythms: retrospectives, pulse checks, cross-boundary learning loops. Frontline staff become intelligence nodes, feeding insights upward. Middle managers becomefacilitators, not blockers. Senior leaders attend to mood and meaning as much as metrics.
CI, then, is not a layer added after implementation. It is the organisational breath that keeps the TOM alive.
4.5 Three Dimensions in Dialogue: Structure, Leadership, and Flow
When these dimensions—structure, leadership, and CI—are brought into dialogue, something newbecomes possible. The TOM shifts from being a static diagram to a living organism. Each part amplifies the other:
· Structure gives form but not life.
· Leadership brings coherence and psychological space.
· CI moves energy and learns in motion.
Together, they allow the organisation to become self-sensing, self-correcting, and purpose- aligned. Crucially, this model is not one-size-fits-all. It flexes based on sector, maturity, context, and strategic intent. But the integration is the invariant—change only endures when these dimensions are aligned.
4.6 Releasing the Blueprint, Returning to the Body
Perhaps the most radical implication of this model is its invitation to release control. The traditional temptation is to design and deploy, to fix and finish. But in systems that are alive—whetherecological, biological, or organisational—completion is an illusion. What matters is responsiveness.
Leaders navigating complex transformations are invited to shift from “delivery” to “dialogue,” from answers to awareness. To ask:
· What is emerging here, even if I don’t yet understand it?
· What does the system already know?
· Where is energy flowing—and where is it stuck?
· What am I not listening to?
In this posture, the TOM becomes not a tool but a practice. Not a map, but a muscle. Not an answer, but an inquiry.
And it is here—in the quiet intelligence of a listening organisation—that true transformation begins.
Section 5. The SJG Pillars in Practice: Designing from Wholeness
While frameworks and theoretical insights provide necessary scaffolding, transformation only takesroot when it is lived—in choices made, relationships held, and systems tuned to purpose. This section explores the three foundational pillars that underpin the SJG Global Consulting approach:
Target Operating Model design, Leadership Development, and Continuous Improvement. Together, these dimensions do not act in sequence but in mutual reinforcement, forming a whole-system intervention model.
“What distinguishes this approach is not just the presence of each pillar, but the way they arewoven into one another, producing outcomes that are not just effective but enduring.” (C.Taylor)
5.1 Target Operating Model: Architecture as a Reflection of Intent
A Target Operating Model (TOM) is not merely a plan for how an organisation should operate. At itsbest, it is a reflection of the organisation’s values, capabilities, and desired future state—articulated in the language of systems, processes, and people.
Too often, TOMs are reverse-engineered from static benchmarks or borrowed frameworks—disconnected from the actual flow of value or the rhythm of the organisation’s context.
The SJG approach rejects this “lift and shift” method.
Instead, TOMs are designed through a co-creative process that asks:
· What value are we truly here to deliver—and for whom?
· Where does value currently flow? Where is it blocked?
· What patterns of structure, behaviour, and power are shaping what is possible?
McKinsey (2023) notes that organisations often focus TOMs on structural alignment while neglecting behaviour and mindset alignment—leading to short-lived implementation success.
Accenture’s "Operating Model of the Future" whitepaper (2023) supports this integrated view,advocating for TOMs that are dynamic, iterative, and grounded in strategic purpose.
TOM work in this frame is not about producing charts—it is about creating clarity without rigidity. The structure that emerges is grounded in value streams, aligned to organisational maturity, andresponsive to feedback. It becomes the foundation—but not the limitation— of what is possible.
Importantly, the TOM is treated not as a design artefact but as a living hypothesis, to be tested, evolved, and re-tuned over time. This requires not only structural fluency, but human sensitivity.
5.2 Leadership Development: Building the Conscious Capacity to Hold Change
If the operating model providesform, then leadership providesconsciousness. No structure, however elegant, will sustain itselfwithout the maturity, coherence, and psychological presence of those responsible for holding it.
The SJG pillar of Leadership Developmentis grounded in the belief that transformationis as much about who we are becoming as it is about what we are changing. Development is approached not as the acquisition of knowledge but the expansion of awareness.
This is informed by frameworks such as:
· Vertical Development (Torbert, Cook-Greuter): assessing the meaning-making capacity of leaders across levels of complexity
· Adult Development Theory (Kegan): exploring the evolution of identity and self- authorship
· Integral Leadership (Wilber): integrating interior and exterior domains of individual and collective systems
In practical terms, this work involves:
· Facilitated inquiry and reflection
· Identity-based leadership labs
· Listening labs across all levels of the organisation
· Experiential learning aligned to business context
· Developmental coaching and feedback systems
Rather than teaching leaders to “manage change,” this approach cultivates the capacity to host complexity, hold paradox, and relate across differences—qualities essential to sustaining new operating models.
KPMG (2023) found that only 31% of leaders surveyed globally felt confident leading through ambiguity—highlightingthe developmental gap that SJG'sapproach is designed to address.
The result is not a cohort of better managers, but a network of meaning-makers—people who can sense, shape, and shift the organisation from within.
5.3 Continuous Improvement: Flow as a Way of Knowing
Continuous Improvement (CI) is often reduced to a set of tools: Lean, Six Sigma, Agile. While useful, this instrumental view obscures CI’s deeper potential: as a way of being in relationship with the system.
In the SJG approach, CI is treated as a cultural and energetic practice, not a toolkit. It is a distributed form of intelligence—embedded not in one department, but in every team, everyinteraction. It creates the conditions for the organisation to become self-aware and self-correcting.
This involves:
· Embedding retrospectives, pulse surveys, and feedback loops
· Empowering teams to identify friction and act without delay or judgment
· Creating forums for cross-boundary learning and systemic insight
· Developing the organisational patience and trust required to listen
Deloitte (2024) notes that organisations that embed CI into cultural rhythms are significantly more resilient and adaptive, and Accenture (2023) confirms that companies with mature CI ecosystems outperform their peers in innovation and employee engagement.
CI becomes more than optimisation. It becomes learning in motion—the pulse of a system that is alive, evolving, and in constant dialogue with its environment.
When paired with conscious leadership and a responsive TOM structure, CI provides the agilityto stay relevant without burning out. It allows operating models to move with the world, not lag behind it.
5.4 Interdependence, Not Addition
These three pillars—TOM, Leadership, and CI—are not modules to deploy in parallel. They are relational elements, each activating and amplifying the other.
· A TOM built without leadership maturity will collapse under the weight of its own ambition.
· Leadership cultivated without CI loops risks becoming disconnected from real-world outcomes.
· CI introduced without strategic architecture becomes directionless busyness.
Together, however, these pillars create organisational coherence. They align purpose and process.They build rhythm and resilience. They enable adaptation without fragmentation.
This is the heartbeat of the SJG approach: a way of designing, sensing, and evolving from
wholeness—not parts.
5.5 Implications for Organisations at Every Stage of Maturity
One of the most powerful aspects of this model is its flexibility. It scales down to SMEs and scales up to global systems. For a small business navigating growth, it provides simple tools to align team energy with customer flow. For complex organisations, it provides a developmental map for systemic reinvention.
· The TOM pillar becomes the architecture to prioritise what matters.
· The Leadership pillar provides the developmental fuel to hold change.
· The CI pillar becomes the circulatory system that keeps the whole organism alive.
What unites them is not form but intent. Organisations don’t need more programmes; they need fluid pathways into new ways of being.
Section 6: Application in Organisations – Patterns, Archetypes, and Maturity
Designing a living operating model requires more than a universal methodology—it calls for attunement to the maturity, rhythm, and constraints of each unique organisational context.
While the SJG pillars—Target Operating Model, Leadership Development, and Continuous Improvement—remain foundational, how they manifest depends on the developmental readiness of the system.
In this section, we move from theory to praxis. Rather than naming specific companies, we draw on real-world examples—composite archetypes from work across industries and sectors—to illustrate how these three dimensions interact in different contexts.
6.1 The Legacy Giant: Navigating Structural Inertia Context
A long-established multinational telco services provider had invested heavily in restructuring to cut costs and increase delivery efficiency. Its TOM redesign included new delivery models, centralised functions, and digital tooling—but three years in, productivity gains had plateaued, and engagement scores were falling.
Diagnosis: The operating model had been implemented top-down, with little attention to cultural dynamics or leadership alignment or systems thinking. While processes changed within businessunits, the power structures and leadership behaviours remained unchanged. Middle managers struggled to make decisions; silos persisted despite the formal matrix; improvement initiatives failed to scale.
Consulting Insight: According to McKinsey (2023), over 70% of large-scale TOM initiatives in legacyfirms fail to meet expected benefits due to “frozen” middle management layers and a disconnect between strategic design and daily decision-making.
Intervention: Rather than launching another restructure, the intervention focused on activating the leadership and continuous improvement pillar. Through a leadership development academy grounded in vertical development theory and system sensing, key actors were invited to shift frommanaging deliverables to holding adaptive space. Alongside this, continuous improvement forumswere introduced—peer-led, inquiry-driven, and cross- functional—to encourage systemic learning and engagement.
Outcome: While the structure remained largely intact, the quality of relational energy within the system shifted. Leaders began to operate from a deeper level of awareness, enabling a moreemergent approach to performance and improvement. The TOM was no longer treated as a static plan, but as a field of practice.
6.2 The Scale-Up Striver: Building Operating Rhythm from the Inside OutContext
A rapidly growing digital localisation firm had doubled in headcount in under two years. Withmultiple markets, dispersed teams, and a founder still embedded in decision-making, operational chaos began to set in. There was no formal operating model, but leadership knew it needed one.
Diagnosis: The company had energy, creativity, and talent—but lacked clarity and consistency. Leadership was reactive, and decisions were bottlenecked at the top. People were unsure how toprioritise or escalate issues. Despite high output, burnout and turnover were increasing.
Consulting Insight: Bain & Company’s research into scale-ups notes that companies often outgrowtheir operating model unconsciously, resulting in decision bottlenecks and cultural misalignment.
Intervention: Instead of imposing a heavy operating model, the focus was on establishing a shared language of flow and responsibility. Using value stream mapping with a light-touch Agile framework, the teams collectively surfaced where work got stuck and where roles were unclear.
At the same time, a leadership development programme was introduced—not as a training, but as a reflective container where senior and emerging leaders could make sense of the shifting landscape together. Small-scale continuous improvement rituals were embedded, creating a drumbeat of dialogue and adjustment.
Outcome: The result wasn’t a full TOM document—it was an operating rhythm. People gained shared ownership over delivery, and leadership slowly shifted from command to coaching. Thesystem began to self-regulate, and the founder was finally able to step back without loss of cohesion.
6.3 The Public Sector Rebuilder: Reconnecting Purpose, Process, and People Context
A country-level public services organisation was under pressure to modernise—digitise processes,increase transparency, and manage significant workforce reduction, all under intense public and political scrutiny.
Diagnosis: The existing operating model was outdated, paper-heavy, and highly fragmented. Efforts to modernise had failed previously due to cultural resistance, political complexity, and a sense of being “done to” rather than engaged.
Consulting Insight: Accenture’s 2023 research into public sector transformation highlights the importance of co-creation, participatory design, and value-led transformation over purely technical change.
Intervention: Rather than launching a large-scale transformation programme, the approach began with deep listening and participatory design. Service leads and frontline staff were involved in mapping current value flows and identifying barriers to delivering high-quality public services. Continuous improvement circles were introduced at the service delivery level, creating space for teams to learn and adjust together.
Leadership work focused on increasing psychological safety and adaptive capacity—helping teams move from fear of scrutiny to pride in experimentation.
Outcome: Within a year, several low-cost service improvements had been implemented by the teams themselves. The narrative around change began to shift. The operating model redesign was no longer a compliance exercise but an inclusive act of co-creation. Trust, while still fragile, had begun to rebuild.
6.4 Patterns Across Archetypes
Though each of these archetypes is distinct in context, several common themes emerge:
Pattern
Insight
Structural redesign without leadership development creates misalignment and reversion.
Change collapses under the weight of unprepared identity structures.
Continuous improvement works best when embedded early, not introduced post- implementation.
Feedback must shape the design—not just evaluate it.
Leadership maturity is the multiplier.
The same TOM will succeed or fail depending on how leaders relate to it.
The sequence is not fixed—but the interdependence is essential.
Some begin with CI, others with strategy—but eventually all threemust dance together.
Deloitte (2024) reinforces this interdependence, stating that enduring transformation emerges whenleadership, cultural rhythms, and structural strategy are synchronised from the outset.
6.5 Adapting to Organisational Maturity
These case examples also illustrate the importance of meeting organisations where they are:
· Early-stage or fast-growth firms may need lightweight structures, rhythm-building rituals, and leadership coaching to prevent burnout and create coherence.
· Mature legacy organisations often benefit from a leadership reset, where power dynamics are rebalanced and feedback is welcomed again.
· Public institutions and non-profits require deep trust-building and slow, steady co- creation—where culture change often precedes process change.
SJG’s model flexes accordingly. It is not offered as a product to buy, but as a framework to think with—a lens that helps organisations see themselves more clearly.
Section 7. Mergers and Acquisitions — Where Operating Models Meet Human Complexity
In the theatre of transformation, few acts are more laden with expectation—and risk—than a merger or acquisition. Valuations are agreed, strategic intent declared, and synergies promised. Yet beneaththe spreadsheets lies something more elusive: integration not just of operations, but of identity.
The operating model becomes the terrain upon which this integration is attempted. But when viewed solely as structure or cost logic, TOMs often falter. According to a McKinsey study (2023), up to 70% of M&A deals fail to deliver anticipated value, with cultural misalignment and poor integration of human systems cited as recurring culprits. Bain & Company echoes this, noting that operatingmodel misfires—not strategy—are among the most common reasons synergies evaporate post-deal (Bain, 2021).
If a TOM is treated as a blueprint to impose, the result is often resistance. But if it is approached as afield to tune into, a deeper integration becomes possible—one that acknowledges grief, excitement, ambiguity, and possibility in equal measure.
7.1 Beyond Structural Stitching: The Call for Systemic Listening
Traditional M&A approaches favour structural stitching: aligning functions, rationalising roles,integrating systems. Yet these efforts often ignore the relational field that holds the newly forming entity.
Scholars such as Chris Argyris (1990) and Edgar Schein (2010) remind us that change, particularlyin organisational identity, cannot be led solely from the top. It must be sensed throughout the system. The act of merging is not just logistical—it is liminal, a space between stories where new meaning can emerge.
In this space, the TOM must do more than design; it must listen. Not just to what the strategy says, but to what the people know. Where is energy blocked? Where are fears unspoken? Whatlegacy is being mourned or defended? Without this systemic listening, integration becomes assimilation—and innovation stalls.
7.2 Cultural Alchemy: Holding Two Truths at Once
A TOM post-merger is often tasked with choosing “the best of both.” But this framing creates winners andlosers. Instead, a third space must becreated—what organisational theorist William Isaacs (1999) might call a space of “dialogue, not debate.”
This space honours both legacies while inviting emergence. The operating model becomes lessabout compromise and more about co-creation—not just what functions will look like, but what kind of organisation this is becoming.
This shift requires leadership with vertical capacity—leaders who can hold paradox, ambiguity, and complexity without needing to collapse it into immediate certainty. As Bill Torbert (2004) andSusanne Cook-Greuter (2005) illustrate, transformation requires action logics beyond the conventional—leaders who are not just change agents but meaning- makers.
7.3 Value Streams as Bridges, Not Battlegrounds
When merging two organisations, value streams often appear as battlegrounds—whose process is better, whose system more efficient. But in a living TOM, value streams are reframed as bridges. They invite inquiry:
· Where does value truly flow?
· Where do handoffs drop meaning, not just efficiency?
· Where do our collective efforts converge—and where do they fracture?
Frameworks such as Lean Enterprise (Humble, O’Reilly & Kim, 2014) and the SAFe Value Stream Mapping method offer tools for navigating these questions. But the true transformation lies not in the map—but in how it is made.
Cross-boundary workshops, shadowing between functions, and real-time experimentation can create connective tissue. What emerges is not a new process, but a shared pattern of thinking and sensing. That is the real operating model.
7.4 Continuous Integration, Not Just Improvement
In M&A contexts, CI must evolve from improvement to integration. Inspired by Kaizen and the Deliberately Developmental Organisation model (Kegan & Lahey, 2016), the organisation learns to learn—together.
CI rituals in this space might include:
· Cultural sensing sessions across legacy entities
· Narrative retrospectives—what stories are being lost, held, or evolved?
· Peer coaching and vertical leadership dialogues
· Real-time feedback loops from customers navigating the transition
This is not about polishing performance—it is about integrating identity. In living systems, improvement is not a task—it is the breath of coherence.
7.5 The Invitation of M&A: From Transaction to Transformation
A merger is more than a business event. It is a rite of passage. And like all rites, it has the potential to initiate not just a new structure, but a new consciousness. If approached with depth, curiosity, andcoherence, the TOM becomes a vessel—not just for efficiency, but for evolution.
This requires a new leadership question—not “How do we align quickly?” but: “What wants to emerge here—and how can we support its becoming?”
In this light, the TOM ceases to be a mechanism of control. It becomes a conscious design practice, alive to the field, attuned to energy, and able to regenerate from within.
Section 8. Conclusion – Returning to Wholeness: A New Way Forward
Most operating models do not fail because the strategy was weak or the systems were flawed. They fail because transformation was approached as a structural shift, not a consciousness shift. A newprocess was deployed, but the pattern beneath it remained unchanged.
At the heart of transformation lies a deeper paradox: the longing for control in a world that is fundamentally emergent. We prescribe blueprints. We issue directives. We chase KPIs.
But we rarely pause to sense what the system itself is asking to become.
This research illuminates a different pathway—one that moves from top-down instruction to whole-system inquiry. It shows that living transformation occurs when three capacities are brought into rhythmic interplay:
1. Structural Clarity that reflects how value actually flows
2. Leadership Maturity that sees complexity as information, not disruption
3. Continuous Improvement as the organisational breath—daily, conscious, embodied
These are not components to install. They are patterns to cultivate. And when woven togetherthrough intention and attention, the organisation becomes not just effective, but alive. It breathes. It listens. It learns how to become itself.
This is not simply a Target Operating Model. It is a Living Operating Model—a coherent field of purpose, structure, leadership and flow.
8.1 From Fragmentation to Flow: Post-Merger, Post-Blueprint
Nowhere is this more urgent than in Mergers & Acquisitions, where two organisational souls are asked to merge overnight. The failure of integration is rarely about systems. It is about unseen tensions—misaligned values, leadership fractures, invisible grief in the culture.
The Living Operating Model offers a post-merger pathway rooted not in control, but coherence.
· Not integration for efficiency, but convergence for shared emergence
· Not rolling out a template, but reweaving a new pattern
· Not installing new leaders, but developing the leadership maturity needed to metabolise the whole
When two systems merge, so too must their energy fields, their feedback rhythms, their mirrorballs of leadership. Only then does the merger become a rebirth—not a hostile takeover of spirit.
8.2 The Mirrorball of Leadership: Seeing People Whole
At the centre of this evolution is a new kind of leadership. Not the charismatic individual, but the relational field—the mirrorball.
Every individual reflects a different facet of brilliance: talent, trauma, insight, neurodiversity, lived experience, latent power. When leaders truly see this—see beyond role, beyond productivity—they don’t just unlock performance. They unlock coherence.
This is what we call the Mirrorball Effect. When every person is recognised as a vital reflection of the whole, the leadership light that emerges is dazzling.
This paper invites leaders to:
· See the system, not just the silos
· See potential, not just performance
· See diversity as the source code of innovation
· See wellness as the foundation of sustainability
· See humanity—because that is the only lens transformation can breathe through
8.3 A Call to Inquire, Not Implement
If this paper ends without a roadmap, it is by design. Living systems cannot be downloaded. They must be hosted into being.
If your organisation is feeling the pressure to change—but unsure what to change into— pause. You may be standing at the threshold of evolution, not just execution.
The invitation is not to ask:
“What do we do?”
But rather:
“What are we here to become?”
In that question lies your future operating model. In that dialogue lies your next emergence.
And in that moment of seeing—really seeing—your people, You may just find the soul of your system waiting to lead.
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