By Nabeel Siddiqui, MSMS (MIT Sloan), MBA (HEC Paris), B. Engg. (Computer Science)
LinkedIn: https://www.linkedin.com/in/nabeelsiddiqui
“Strategy without execution is hallucination,” Thomas Edison
As consulting leaders, we’ve all seen it before: ambitious transformation strategies announced in boardrooms that ultimately stall in execution. Organizations set a bold direction but struggle to align their capabilities, processes, and people to realize it. The result? Disconnects between intent and impact. Between vision and velocity. Between strategy and execution.
This is where the Target Operating Model (TOM) becomes mission critical.
A well-designed TOM is not just a blueprint. It’s the connective tissue between high-level ambition and practical delivery. It turns strategy into an operating reality, defining how people, processes, data, and technology come together to drive outcomes.
This article breaks down the why, what, and how of TOMs, drawing on real-world consulting experience and showcasing their role in bridging the gap that often derails enterprise change.
Why Operating Models Fail Without a “Target”
In the age of AI, cloud, and digital reinvention, organizations are constantly adjusting their business strategies. But unless they rewire their operations in tandem, strategy remains theory.
Here’s why execution often falters:
- Fragmented decision rights and unclear governance
- Misaligned capabilities between business and tech functions
- Siloed data and disconnected systems
- Lack of talent enablement for new ways of working
- Change fatigue from poorly phased transformation
TOMs solve these challenges by providing a cohesive, forward-looking model of how an organization should operate across capabilities, structure, processes, and technologies—to achieve its strategic intent.
What is a Target Operating Model?
A Target Operating Model is a structured representation of an organization’s future-state design across seven dimensions:
The 7 Pillars of a Target Operating Model
- Process & Capabilities – What core activities must be done differently?
- Organization & Governance – Who owns what, and how are decisions made?
- Technology & Tools – What platforms, systems, and automation will enable delivery?
- Data & Insights – What data is needed, where does it live, and how is it used?
- People & Skills – What workforce competencies are needed to deliver value?
- Customer & Channel – How is value delivered to users and clients?
- Performance & KPIs – What metrics define success?
Pro Tip: Tailor the TOM design based on sector maturity, enterprise size, and regulatory context. A federal agency TOM will look very different from that of a high-growth SaaS company.
The Power of TOMs in Consulting and GTM Execution
In consulting, the TOM is not just a design artifact, it becomes the anchor for scaling offerings, aligning GTM plays, and building delivery confidence.
From the GTM Trenches:
When launching a new AI-infused cloud transformation offering for the public sector, our team at IBM Consulting found that articulating a repeatable TOM framework did three things:
- Unified sales and delivery around a common vision of success
- Enabled customization by agency type (defense, civilian, state)
- Allowed delivery teams to estimate and mobilize faster
In essence, the TOM helped productize a consulting service, transforming a loose methodology into a scalable, sellable, and deliverable solution.
How to Build an Effective TOM: A Step-by-Step Playbook
Step 1: Anchor in Strategic Intent
Start by asking: What are we solving for? Growth? Efficiency? Innovation? Mission transformation?
Map strategic goals to desired business capabilities and customer outcomes.
Step 2: Conduct a Capability Heatmap
Assess current capabilities using a maturity model from ad-hoc to optimized. Identify gaps between current state and desired future state.
Step 3: Design the Future-State Model
Use TOM canvases or architecture tools to map each of the 7 pillars. Define decision rights, technology enablers, org charts, data flows, and more.
Step 4: Validate Through Scenarios
Test the TOM through real scenarios, “day in the life” of a frontline employee, or “how a service request flows end-to-end.”
Step 5: Create a Phased Roadmap
Map initiatives to each TOM pillar. Group them into “must-haves” and “accelerators.” Tie to funding, milestones, and outcomes.
TOMs in Action: Public Sector Use Case
Let’s take a federal agency modernizing its benefits eligibility system. Their strategic goals include improved access, reduced fraud, and increased transparency.
A TOM helped them:
- Identify AI-enabled verification processes
- Shift from siloed case workers to cross-functional pods
- Implement modular cloud platforms that scaled securely
- Build data trust frameworks across state lines
- Measure success with KPIs tied to citizen outcomes
Result: A 30% reduction in processing time and a 25% increase in citizen satisfaction—driven by a TOM that aligned systems, people, and policy.
Target Operating Models and AI: A New Frontier
In today’s AI-first enterprise, TOMs play a new role: embedding intelligence into the operating fabric.
How TOMs Support AI Scaling:
- Define responsible AI governance models
- Identify processes ripe for automation or augmentation
- Structure human-machine teaming roles
- Set up feedback loops to retrain models with operational data
TOMs are no longer static design tools, they’re evolving to become dynamic, learning systems powered by AI, adaptive workflows, and real-time analytics.
Common Pitfalls to Avoid
| Pitfall | Fix |
| Designing in isolation | Co-create TOMs with business, IT, and customer input |
| Focusing only on org charts | Include tech, data, and process design |
| Making it too abstract | Validate with scenarios and delivery readiness |
| Ignoring culture | Embed change enablement and capability uplift |
| One-and-done mindset | Treat TOMs as living frameworks that evolve |
Closing Thoughts
In a world where strategy can change overnight, execution is the new differentiator. The organizations that win aren’t those with the boldest plans, but those with the clearest operating models to turn vision into value.
As consultants, leaders, and GTM professionals, the TOM is our compass, map, and engine all in one. Let’s build models that don’t just theorize the future but deliver it, at scale.
References
- MIT Sloan Management Review – “How Operating Models Enable Digital Transformation”
- IBM Institute for Business Value – “Making Operating Models More Agile”
- Gartner – “Designing Target Operating Models for Business Agility”
- Harvard Business Review – “The Hard Side of Change Management”
