The operating model is the strategy
Why organizational structure, decision rights and cross-functional coordination increasingly determine whether strategic priorities translate into performance.
Read articleCross-functional coordination breaks down where shared outcomes meet fragmented authority
Cross-functional work rarely fails because specialists cannot cooperate. It fails when an outcome is shared but authority, budgets and performance measures remain divided. Each function can make a defensible local decision while the end-to-end result deteriorates. More meetings then add information without resolving who may trade one priority against another.
Start with the outcome and its dependency chain. Map the hand-offs, decisions and resources that determine customer value, speed or risk. For each, distinguish input from consent, decision rights from execution and escalation from routine coordination. If two leaders can veto but neither can decide, the design has created negotiation as an operating process.
Make interdependence visible through shared measures. Functional cost and service targets still matter, but they should sit beside cycle time, first-time quality, customer outcome and total economic impact. Track queues and rework at boundaries, not only activity inside teams. Shared data turns friction into a constraint that an accountable owner can address.
Govern only the conflicts that require joint judgment. Establish a small forum with named decision owners, explicit tolerances and pre-agreed rules for capacity, risk and priority trade-offs. Push reversible decisions close to the work; escalate only choices whose impact crosses boundaries. The 2026 Orange Book similarly links clear roles with appropriate delegation, aggregation and escalation.
Finally, align consequences. Resource allocation, objectives and recognition must reflect the enterprise outcome, or collaboration remains voluntary when pressure rises. Review recurring exceptions as evidence that authority or process is wrong, then redesign the interface. Coordination becomes reliable when people can resolve dependencies through the operating system�not through personal influence or heroic intervention.
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Why organizational structure, decision rights and cross-functional coordination increasingly determine whether strategic priorities translate into performance.
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Read articleFocus
Operating models often preserve historical structures long after strategic priorities, customer needs and execution requirements have changed.
Behavior is shaped less by stated values than by the routines, incentives and informal norms people experience daily.
Strategic challenges
The challenge is removing ambiguity while preserving the checks needed for risk, integration and sound judgment.
The challenge is turning collective intent into consistent choices when trade-offs affect leaders differently.
POV
A credible model standardizes where scale, risk or integration justify it and leaves discretion where context matters.
If work crosses boundaries, accountability and interfaces must cross them too; goodwill is not a control system.
Strategic impact
Well-defined roles reduce duplication, managerial ambiguity and reliance on informal knowledge of who owns what.
Defined global, regional and local accountabilities reduce duplication, escalation and recurring conflict.
What we observe
We frequently see formal structures that say little about informal approvals, duplicated authority or unresolved cross-functional dependencies.
Nominal owners become coordinators when decision rights, resources and escalation routes remain elsewhere.