A manufacturer opens a second factory, then a third. Each is run by a capable manager who solves local problems in a local way. Production schedules, reporting, shift patterns, grading and even job titles drift apart. For a while that is fine, even healthy. Then the owner asks a simple question, such as which site is performing best or how many people the group really employs, and discovers that the numbers cannot be compared.
What an operating model is
An operating model is the set of choices about how the business runs: who decides what, how work is organised, what is measured and how, which processes are common across sites and which are allowed to vary. It does not need to be a formal document. It needs to exist, and to be understood by the people running the sites.
Most multi-site businesses have one by accident, built from the habits of whoever opened each site. The question is whether it has been chosen.
The cost of variety
Variety has costs that are rarely added up. Managers move between sites and have to relearn how things work. Good practices at one site do not travel. Reports cannot be combined, so group decisions rest on judgement and persuasion rather than comparison. Pay and grading differ, which makes transfers difficult and creates unfairness that staff notice. And the owner becomes the only person who sees across the whole business.
When six sites each do things their own way, the owner is the only integration the group has.
What to standardise and what to leave
The aim is not uniformity. Local conditions differ, and strong site managers need room to adapt. A useful test is to decide what must be the same for the group to function as one business, and leave the rest.
Usually, the things worth making common are the measures used to judge performance, the structure of roles and grades, the main decision rights, and the basic standards for safety and quality. Things that can often vary include local scheduling, supplier relationships and ways of motivating a particular workforce.
Where to start
Start by describing what exists. Compare, side by side, how each site is organised, how many layers it has, how people are graded and paid, and how performance is measured. The comparison itself is often revealing, and it is rarely welcome news to everybody.
Then choose a small number of things to align first. Reporting is often the easiest to start with because it creates a common language without changing how anyone works. Grading and structure are harder and need more care, since they affect people directly.
The people side
Site managers will notice what is being changed and respond to it. Some will welcome shared standards. Others will feel that their autonomy and their success are being questioned. This is why the work needs a leader with the authority to hold the line, and why it matters that the site managers help to design the common elements. Standards imposed without their involvement tend to be followed on paper and ignored in practice.
A realistic goal
The result should be a business where a manager can move between sites without relearning everything, where the owner can compare like with like, and where good practice travels. That is a better description of a group than a collection of well-run factories.
Thinking about this in your own business?
Talk to Catalyx about HR Advisory