Designing an Operating Model that Works
Second in our series on Financial Strategy: The CFO’s Playbook
"How do we make strategic planning repeatable?" This question echoes across finance organizations as they scale - and while many teams can create a strategic plan, far fewer build sustainable operating models that deliver consistent results while adapting to changing business needs.
Beyond the Annual Planning Cycle
The traditional approach to strategic planning – the annual budgeting cycle followed by quarterly reviews – often falls short for rapidly scaling companies. A common example: a promising technology company struggles to keep pace with its own growth because its planning process can't adapt quickly enough to changing market conditions.
A more effective approach treats strategic planning as a continuous process rather than an annual event. This doesn't mean constant replanning – rather, it means creating a framework that can absorb and respond to new information without requiring a complete reset.
The Power of Clear Decision Rights
Perhaps the most underappreciated aspect of an effective operating model is clear decision rights. Planning processes often stall because stakeholders aren't sure who has final say over which decisions. The solution isn't complex governance structures – it's clarity about decision ownership and appropriate approval thresholds.
An effective framework typically involves three distinct levels of decision-making:
Strategic decisions that affect long-term direction
Tactical decisions about resource allocation
Operational decisions about execution
When organizations establish this clarity, decision-making speed improves dramatically while maintaining appropriate controls.
Creating Meaningful Engagement
A common pitfall is treating strategic planning as a finance-led exercise that happens to other departments. The most effective operating models do the opposite – they create meaningful engagement across functions while maintaining clear guardrails.
Consider how one organization transformed their monthly business reviews from backward-looking variance analysis into forward-looking strategic discussions. The key was shifting the conversation from "why did we miss our numbers?" to "what are we learning and how should we adapt?" This change in framing led to much more productive engagement from operational leaders.
The Role of Rhythm and Routine
A counterintuitive insight: the right amount of structure actually creates more flexibility, not less. When teams understand the rhythm of planning and review cycles, when key decisions will be made, and what information is needed when, it creates space for strategic thinking rather than constant reactive planning.
This pattern emerges consistently - organizations with clear planning rhythms tend to make better decisions faster than those operating in a more ad-hoc manner.
Looking Ahead
The next piece in this series will explore selecting and implementing technology infrastructure that supports this operating model. But remember – technology should enable your process, not define it. The key is getting the operating model right first, then finding tools that support it.
Successful organizations understand that an effective operating model isn't about creating bureaucracy – it's about building frameworks that enable better, faster decisions while maintaining appropriate controls. Getting this balance right is crucial for sustainable growth.
Remember: The goal isn't perfection, but rather creating a model that can evolve with your organization while delivering consistent results.
Fishbone Ventures partners with high-growth companies to build analytics capabilities that scale with their ambitions. Our approach combines rigorous analysis with practical execution to deliver lasting results.
Contributed by Ryan Abbadi (Founder & Managing Partner)