Why Strategy Fails Without an Operating Model
Operating models designed for an earlier stage often fail to keep up, becoming a constraint rather than an enabler.
After more than 20 years in consulting and senior operating roles across payments and fintech, I’ve seen a consistent pattern: strategy is rarely the issue. Execution is.
Leadership teams are usually clear on where they want to go, growth ambitions, customer positioning, risk posture, and market focus. The problem emerges later, as organisations scale, integrate acquisitions, and operate under increasing regulatory pressure and, now, AI-driven change. Operating models designed for an earlier stage often fail to keep up, becoming a constraint rather than an enabler.
Without a clear operating model, businesses tend to drift into a series of local, incremental fixes. Functions optimise for themselves. Regions develop their own ways of working. Technology landscapes grow by accretion rather than design. Over time, this creates operational debt, complexity, fragmentation, and cost, making every new strategic move slower, more expensive, and riskier than it needs to be.
The Role of an Operating Model
An operating model defines how a business needs to run in order to deliver its strategy. It bridges the gap between leadership intent and day-to-day reality by setting out who does what, how work flows, how decisions are made, what capabilities and systems are required, and how performance, risk, and control are managed.
When well designed, an operating model gives leadership a shared and explicit view of how the organisation needs to work over time. It becomes the basis for coordinated investment decisions, a reference point for day-to-day trade-offs, and a practical roadmap for capability building, hiring, and technology choices.
Crucially, it is not an academic exercise or a thick binder. Used properly, it acts as a working North Star, guiding how operations evolve in step with strategy.
Put simply: strategy defines the choices a company makes in the market; the operating model configures the internal engine required to deliver those choices reliably.
An Example from Payments
Consider a payments strategy that states:
“We will become the preferred payments partner for mid-market merchants by offering fast onboarding, reliable settlement, and a simple, integrated customer experience.”
The strategy sets direction, but the operating model is what makes it real. It defines which customer journeys are prioritised first, such as onboarding, underwriting, chargeback handling, settlement, and reconciliation. It determines how sales, operations, risk, compliance, and product teams are organised and coordinated around those journeys.
It also specifies which core platforms support execution, for example KYC/KYB, transaction monitoring, CRM, workflow, and reporting, how they are integrated, and where accountability sits. It clarifies what capabilities are required, from payments product owners to risk specialists and data or fraud analysts. And it establishes how performance is measured across speed, quality, risk, and customer outcomes.
Without these decisions, the strategy remains aspirational. With them, it becomes executable.
A Practical Rule of Thumb
A simple rule applies throughout this work. If the question is primarily about external positioning, ambition, and portfolio choices, it is a strategy question. If it concerns the internal configuration of people, processes, technology, and governance, it is an operating model question.
The most robust operating model designs share a common backbone, structured around a small number of core dimensions: the customer and service proposition; end-to-end journeys and processes; organisation and governance; people and skills; technology and data; sourcing and partnerships; performance management; and risk and compliance.
Getting this right is no longer optional. In payments and other regulated digital businesses, the operating model increasingly determines whether strategy can be delivered at all.