What Do We Mean by a “Dynamic” Operating Model? 

A dynamic operating model has three defining characteristics. It: 

1. separates what must be stable from what must be adaptable 

2. enables rapid reconfiguration of work—not people 

3. is managed as a product, not a one-time design 

This means: 

• Strategy can shift without rewriting job descriptions 

• New services can be launched without new org charts 

• Capacity can move without months of approval cycles 

The key point for today’s episode is you do not design a dynamic operating model -- you plan for its continuous development. 

Step One: Anchor the Model in Outcomes, Not Structure  

The first mistake organizations make is starting with structure. 

Who reports where. 
  

Which division owns what. 
  

Where digital or CX should “sit.” 

A dynamic operating model starts somewhere else entirely: outcomes. 

Your plan must begin by answering three questions: 

1. What outcomes matter most to the people we serve? 

2. What outcomes matter most to the organization? 

3. Where are those outcomes currently constrained? 

In government, this might be: 

• Time to decision 

• Ease of compliance 

• Quality of service recovery 

In enterprise, it might be: 

• Speed to market 

• Cost to serve 

• Retention and loyalty 

Your operating model exists to reliably produce outcomes under changing conditions. 
  

If the outcomes are unclear, the model will always be sketchy. 

Step Two: Identify the “Fixed Spine” of the Organization 

Every dynamic operating model has a stable foundation. 

This includes: 

• Core governance 

• Financial controls 

• Risk management 

• Legislative or regulatory obligations 

• Enterprise platforms and data foundations 

Your plan must explicitly document: 

• What cannot change frequently 

• What should not change frequently 

This is not a limitation—it’s an enabler. When people know what is fixed, they are far more comfortable adapting everything else. Dynamic organizations are not chaotic.  They are clear about their non-negotiables. 

 
Step Three: Design for Flow, Not Functions  

The third element of your plan is shifting how work is organized. 

Traditional operating models organize around: 

• functions 

• programs 

• channels 

Dynamic operating models organize around value flows. 

That means: 

• End-to-end journeys 

• Products and services 

• Capabilities that cut across silos 

Your plan should define: 

• The major value streams that deliver outcomes 

• The capabilities required to support those streams 

• How those capabilities are shared, not duplicated 

This is where agility actually comes from—not from agile ceremonies, but from reducing handoffs and ownership ambiguity. 

Step Four: Build an Evolution Roadmap, Not a Target State  

This is the most important shift. 

Static operating models aim for a “future state.” 

 
Dynamic operating models plan for perpetual evolution. 

Your plan should include: 

• A 12–18 month evolution roadmap 

• Clear hypotheses about what changes will unlock value 

• Lightweight governance for testing and adjusting 

Think in terms of: 

• “If we change this capability…” 

• “If we move ownership here…” 

• “If we standardize this platform…” 

Then measure, learn, and adapt. 

A dynamic operating model is never finished. 
  

To wrap 

Developing a dynamic operating model is not a design exercise—it’s a leadership commitment. 

It requires leaders to: 

• Let go of false certainty 

• Reward learning, not just compliance 

• Invest in capability, not just capacity