The need for new operating models

Organisations have encountered significant disruption to global business over the last two years, causing a revolution in operational and technological processes. The majority of businesses had to move online, supercharging the digital space and the necessity to rapidly transform. Organisations have had to adapt, fast.

Prior to the pandemic, brands were already seeking greater efficiency and transparency into their spend, but changing consumer behaviours have amplified and accelerated the process. Digital transformation and growth into new markets is now more urgent than ever, causing an overhaul of internal operations as businesses recognise the need to make more efficient and agile decisions.

This has, of course, presented significant challenges. Organisations have struggled to scale, lacking the capability and capacity to deliver solutions, all exacerbated by a troubling talent shortage. However, in times of turbulence and radical change, there are opportunities. New technology is being adopted quickly, with digital platforms boosting efficiency and delivering products that customers suddenly need. The remote work revolution, too, is providing access to a global and agile workforce; a model that Croud already advocated and operates advantageously.

At the intersection of technological development and sheer necessity, organisations have scrambled to implement digital transformation strategies in order to survive. Ultimately, most businesses and brands need to reassess their operating models to be fit for purpose in a radically changing world.

Why consider different operating models?

Implementing the right operating model can be truly transformative, and potentially the difference between success and failure. A different approach can provide greater flexibility and agility, allowing businesses to respond effectively in uncertain times. This shouldn’t just be a post-pandemic consideration, either, as digitisation, globalisation and automation guarantee an ongoing acceleration in change.

An appropriate operating model can also overcome the challenges of scaling, as businesses expand into new markets and experience global growth. Furthermore, a balanced model ensures the efficiency and consistency of global centralisation, without compromising on local needs and opportunities.

There are additional, significant benefits to organisations that implement bespoke and suitable operating models:

  • Alignment on objectives and clear communication
  • Increased flexibility and efficiency
  • Helps overcome business challenges
  • Increased effectiveness at a local level
  • Helps manage complexities

What are the common challenges businesses face when their current model isn’t working?

Managing a business in times of economic turbulence is hard enough, but the challenges are almost insurmountable when the operating model isn’t fit for the organisation.

Multiple budget sources can create confusion for global brands, compounded by the conflicting objectives of multiple stakeholders. Additionally, with global interests somewhat detached from local needs, they can lack a clear view of opportunities and don’t allocate sufficient budget or time to drive local initiatives. In turn, local teams become frustrated and dissatisfied with the partner agency service.

Similarly, a disconnected operating model results in poor information visibility and a lack of transparency in budgets, roadmaps and performance reporting. In order to streamline and balance the long term budget and organisational interests of global with the agile and nuanced needs of local, we need to explore optimal operating models.

An introduction to the common operating models

There are various ways to structure your organisation and implement processes, but there are established and proven operating models for global brands.

  1. Dispersed model. This is where local markets operate independently, resulting in inconsistency and an overall lack of control at a global level. The local teams, however, benefit from speed to market and highly targeted campaigns.
  1. Centralised operation. In this model the global strategy is established and run from HQ, providing a single, consistent directive for a multi-market rollout.
  1. Network of local market agencies. Managing an agency network from the global HQ provides additional control and consistency than the dispersed model, however this comes at much greater expense and complexity.
  1. Hub and spoke model. This model offers a good balance of consistency, flexibility and efficiency, by establishing regional hubs that are managed at a global level, yet also have the autonomy and ability to tap into local resources when required.

What are the key considerations to find the right model for your business?

In today’s volatile and rapidly evolving business landscape, reinventing your operating model to embrace agility is going to provide significant benefits. But what does this look like for each individual organisation?

This will, of course, depend on the unique complexities of your business and the state of the market. What works for some brands, may not necessarily be the solution for others. One thing is for certain: it’s absolutely crucial to consider the audience in every market in which you operate. Ultimately, we’re providing products to consumers, and the customer experience should be at the heart of an effective operating model. This obviously needs to be delicately balanced with stakeholders’ interests, however, to ensure that the model is also profitable and viable long term.

Finally, modern operating models are largely dependent on data and tech maturity, and they should therefore be another key consideration in establishing a fit for purpose, futureproof architecture.

What can a model that balances a global approach with an appreciation for local market nuances achieve?

Organisations that implement an effective model and strike the right balance between global and local interests can achieve remarkable transformation and success.

The global team is empowered to deliver the long term strategy and best practices frameworks through clear processes, communication and governance. The local markets are supported to reach a standard of excellence, with the resources, shared knowledge and flexibility to account for vast variances in culture, language, economies and competitors.

Overall, the organisation as a whole benefits from:

  • Rapid scalability
  • Operational and financial efficiency
  • Deeper strategic alignment
  • Consistency through adherence to best practices
  • Greater agility

In practice

Croud is an example of a centralised model with dispersed resource. Croud’s unique model, where our internal team is supported by a global network of 2,500+ digital freelancers, or ‘Croudies’, allows us to provide agile and flexible support to our clients, whilst supercharging the in-house teams. Managed from six hubs around the world, our network is made up of digital marketing experts in over 100 markets, speaking 80+ languages. These Croudies specialise in all aspects of digital marketing – from paid media, analytics and data modelling, to content, creative and localisation.

IWG, the global leader in serviced offices and co-working spaces, had traditionally used network agencies who struggled to balance a centralised plan with the requirements for specialised local knowledge and expertise across the 120+ individual countries they were situated in. However, using the model of Croud’s in-house talent, integrated into IWG’s business at a central level, and the Croudie network who are situated in-market, Croud are able to dynamically support with IWG’s digital performance strategy; proactively identifying and capitalising on opportunities across all countries, and across their extensive portfolio of customer-facing brands.

What does the future hold?

The global situation and local or regional conditions will continue to change rapidly, that’s for sure. The way to adapt and keep your transformation on track is to ensure you have a clear vision and understanding of your customers’ needs.
If you’re looking to overhaul your operating model or expand into new territories, Croud can help revolutionise your global strategy. If you would like to discuss your unique challenges, or how we can support your global growth, get in touch.

by Croud
6 June 2022



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