The promise and pitfalls of digital operating models

Digital operating models can provide a host of insights into your firm’s performance, but prepare for unexpected surprises


Senior bosses at a leading charity were, like all executives, wrestling with the challenges of a work from home workforce. They felt they had a happy, productive working culture, but just to be sure, they onboarded some digital help. 

They began using Winningtemp - an anonymous employee feedback system - which allowed their staff to say what they really thought of procedures, office politics and workflow. Immediately, the charity chiefs had seven instances of “negative or obstructive behaviours” they were worried about. This was a caring and considerate company, but they were blindsided by such work issues.

When we’re asked if everything’s okay, we usually say it is, says Carl Jacobsson, VP of customer success at Winningtemp. “However, given the opportunity to discuss anonymously, staff begin opening up. AI provides that anonymous, intuitive platform for giving constructive feedback.”

Applying a digital operating model (DOM) like Winningtemp to your business is like lifting the lid on a beehive. On the plus side, you can suddenly see what all the worker bees are doing and locate the blocks in workflow. But if the colony doesn’t work in unison or the blockages are allowed to remain, the hive will fail anyway. 

Setting staff loose

DOMs are a set of enabling technologies that fuse feedback with AI and analytics to smooth the path for your company. They break down systems into smaller components, revealing how the bigger picture works. Such technology won’t suit organisations that simply want to select a digital product off the rack and hope for major results. 

A DOM can only succeed if staff are empowered to make positive adjustments and give useful feedback, says Helen Ashton, the former CFO of ASOS and now CEO of management consultancy Shape Beyond. 

ASOS maximised its digital success by marrying agile technology with proactive staff who all had a transparent understanding of data, Ashton says. The role of leaders within a DOM is to support and allocate, rather than dictate, she says. 

“At ASOS, instead of thinking the digitalisation journey is done, teams are continually thinking of what’s next. How could the sourcing of fabrics be digitalised? How can AI or AR [augmented reality] impact future shopping habits or improve speeds of delivery? How could bots or avatars help customer service? Those questions aren’t driven down from the board: they come from the teams on the ground who are closest to the customer.”

Implementing a DOM isn’t just about the technology; it only succeeds if the people and the culture transform at the same time

Delivering this kind of change with legacy technology is difficult, slow and costly. Before investing, C-suites should consider which products truly open the frontiers between customer and company. 

Nikki Hesford, MD of Hesford Media, helps SMEs expand digitally. She says that even if companies aren’t digitally facing, small operational changes can be transformative. 

“A plumber can have the ability for clients to upload images or videos remotely, or a beautician who used to waste ten minutes at the start of each appointment filling in forms now has these sent beforehand using an online system. All this info is then stored securely online, instead of in a filing cabinet.”

One of Hesford’s clients is The Honest Midwife, a mobile midwife. Prior to Covid, appointments were made in-person. However, the switch to digital presented a number of opportunities to scale, and now the midwife teaches over 2,000 expectant parents every week, complete with feedback and aftercare. 

Expose the problem, then fix it

But with so many companies stranded in first gear by endless digital logjams and web chats, a single digital system won’t necessarily bring order to the chaos. Digital innovation can smooth processes, but bottlenecks caused by staff and management will not be magically resolved, only exposed, says Pete Hanlon, CTO at Moneypenny. 

“If you build new technology solutions around ineffective business processes or outdated organisational structures, you’re unlikely to see any benefits. Implementing a DOM isn’t just about the technology; it only succeeds if the people and the culture transform at the same time. Alongside the technology, you need to challenge the status quo. Generate a sense of urgency, with clear goals and processes to measure success.”

The key to DOM success is the open exposure of data and performance. Often a data warehouse is “owned” by a specific department, says Ashton; its usage is restricted or there are barriers to extracting data. A company should therefore ask itself some key questions in advance. Do we want to make all our data and processes transparent to each other? Are bosses ready to back a new system, allow feedback and be prepared to remove blockages – for example, a problematic employee – even if that becomes painful?

Next, you must pick the right figurehead to lead the charge, says Ashton. A misaligned leadership, or a leader lacking leadership skills, will struggle to secure the momentum to deliver a successful programme. 

“Commitment to the cause will undoubtedly ebb away at some stage,” says Ashton. “Emotional engagement to a greater cause will stand the test of a transformation, in a way that the promise of more money for shareholders or lower costs never will.”

DOMs simply may not be for everyone, says Sukhy Cheema, founder of Branding London, which provides digital solutions for businesses. Most operating models only place importance on time efficiency and risk management, when we should appreciate that companies are different and run in their own unique ways, Cheema says. As a result, some DOMs aren’t dynamic enough, Cheema says. 

“The focus should instead be on helping that company know and find what they could be, whilst still moving forward and reducing risk.”