Target operating model design, answered in full.

A target operating model is the design of how an organisation will work once a change has landed: the structure it runs in, the roles people hold, the decisions each of those roles can take without asking, the governance that holds it together, and the route work takes from idea to production. The load-bearing word is target. It describes the organisation you are moving to rather than the one you have, which is what separates it from an operating model review, and it is a design document rather than a strategy: a strategy says where you are going and why, a target operating model says what the organisation has to look like when you arrive.

An operating model describes how an organisation works now. A target operating model describes how it will work once a planned change has landed. The distinction matters in practice because the two are produced differently: the current model is established by observation, including the parts nobody documented, and the target model is designed against outcomes. Most failed exercises are a current-state map with ambitions written in the margins, which is why they change nothing.

Eight things: structure, roles and accountabilities, decision rights, governance and assurance, ways of working, value and measurement, capabilities and skills, and the technology and data the model depends on. Decision rights are the section most often left vague and the one that determines whether the model speeds the organisation up or slows it down, because a model where every non-obvious decision escalates by default is slower than the one it replaced.

Tenhaw does not publish a blank template, and is sceptical of them: a template returns the structure of an answer without the arguments, and the arguments are the work. What Tenhaw does publish is a complete worked example. The Tenhaw Way is a full operating model for product and delivery organisations, published free and adoptable without an engagement, with seventeen how-to guides underneath it covering the individual moves. A worked example you can disagree with is more useful than a form you can fill in.

For an organisation-level design with the architecture designed alongside it, two to four months is realistic, and Tenhaw prices that engagement at £35,000 to £55,000 a month for a pair of one operating-model lead and one agentic architect. Anything materially faster is either a smaller scope than an organisation, or a document rather than a design. The HSBC Global Payment Solutions model took six months to design, pilot and refine at 500-team scope.

The eight components stay. What changes is the content of three of them. Decision rights have to say which decisions move to agents and which stay human, and who is accountable when an agent gets one wrong. Governance has to specify how agent output is verified, evaluated and evidenced rather than reviewed by eye. Ways of working split, because AI-augmented teams and AI-native teams do not run the same process. Everything else is a standard target operating model, which is why a firm whose operating model credentials begin with AI is usually learning the discipline on your programme.

A named executive on the client side, and not the supplier who designed it. An operating model owned by a consultancy lasts exactly as long as the engagement, because the decisions it encodes need someone with the authority to defend them when the first exception arrives. Tenhaw writes the owner into the scope and hands the model over as an asset, which is the same reason its engagements are designed to end.

No, and starting there is usually a mistake. Run the pilots first: they are cheap, they tell you where agents actually pay in your organisation, and they produce the evidence a model needs to be designed against. The point to design a target operating model is when pilots have worked and stopped scaling, because that is the symptom of an operating model problem rather than a technology one. If nothing has been piloted yet, an Agent-Readiness Audit answers where to invest before anyone designs anything.