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.
Because scaling almost never fails on capability. A change that worked in one team fails to reach fifty because reaching fifty means redefining roles, moving decision rights and rewriting governance across functions the original team has no authority over, so every rollout becomes a fresh negotiation with the same three arguments in it. A target operating model is what makes the fifty-first rollout cheap: structure, roles, governance, reporting and value metrics defined once, rather than renegotiated team by team until the programme runs out of sponsor patience.
Each one carries the failure it exists to prevent, because a list of headings is the half a reader cannot act on.
The units the organisation runs in, what each is accountable for, and where the boundaries between them fall. Including the boundaries that move, which is usually the whole point of the exercise.
If you skip itSkip it and the model describes the org chart you already have, so nothing about how work flows actually changes.
Who holds each role, what they are accountable for, and what they are not. Named as accountabilities rather than job titles, because titles vary by region and accountabilities have to be comparable across them.
If you skip itSkip it and two functions each believe the other owns the same outcome, which surfaces at the first escalation rather than the first workshop.
Which decisions each role can take without asking, which need a second signature, and which go to a governance body. The single most argued-over section, and the one that determines whether the model speeds work up or slows it down.
If you skip itSkip it and every non-obvious decision escalates by default, so the new model is slower than the one it replaced and the organisation quietly reverts.
The bodies that meet, what each is allowed to decide, what evidence it sees, and the gates work has to pass. Including who can stop something, which is the authority most models leave implicit.
If you skip itSkip it and governance becomes a reporting meeting: status is presented, nothing is decided, and the gates exist on paper only.
How work is broken down, sequenced, estimated, reviewed and released. The operating rhythm, the rituals that carry it, and the cadence each runs at.
If you skip itSkip it and the model is an organogram. Structure without a rhythm tells nobody what to do on Monday.
What the organisation counts as value, in currency where currency applies, who owns each measure, and how often it is validated against reality rather than against the forecast.
If you skip itSkip it and the programme reports activity, because activity is the only thing left that can be counted.
What the organisation has to be able to do that it currently cannot, how that capability arrives, and who holds it afterwards. Buying it and building it are different answers with different year-two consequences.
If you skip itSkip it and the model assumes a workforce that does not exist yet, which is discovered at the point of rollout.
The platforms, integration and data access the model depends on, designed alongside it rather than after it. A target model the platform cannot support is a document rather than a design.
If you skip itSkip it and the operating model and the architecture are designed by different people to different assumptions, and the gap is found in build.
Most searches for a target operating model example are looking for a template. This is not one, and the difference is the point.
Tenhaw publishes a complete operating model in full, free to read and free to adopt without an engagement. The Tenhaw Way sets out four values enforced as operating decisions rather than posters, a work breakdown in which nothing exists that does not trace to a priced business outcome, two delivery modes for AI-augmented and AI-native teams, quarterly timeboxes that leave tech debt and bugs nowhere to hide, hard approval gates at the points agile usually skips, and a fixed cadence of seven rituals. Seventeen how-to guides underneath it cover the individual moves. It is a worked example rather than a blank template: it shows one organisation's answers rather than giving you a form, and the answers are the part worth arguing with.
Six steps. The third is where most exercises go wrong, and the first is what decides whether anyone believes the rest.
James Rooney co-led the design, piloting and refinement of the target operating model HSBC's Global Payment Solutions division is due to roll out across 500 teams and a $450M portfolio in 2026. It has not yet rolled out, and the 500 teams are the scope of the model rather than the extent of anyone's authority. It also was not an AI programme, which is the reason it belongs on this page rather than only on the AI one: the discipline is operating model design, and AI is the current thing organisations are redesigning around rather than the reason the discipline exists.
The engagement is written up in full, with its limits, on the HSBC Global Payment Solutions case study.
The eight components above do not change. Three of them take on new content: decision rights have to say which decisions move to agents and who is accountable when one gets it wrong, governance has to specify how agent output is verified and evidenced rather than reviewed by eye, and ways of working split, because AI-augmented and AI-native teams do not run the same process. Everything else is a standard target operating model.
The questions people arrive with, answered before the pitch.
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.
An operating-model lead and an agentic architect, designing the model and the architecture together, ending on a sequenced plan your own teams can execute.
The Agentic Design Team is a pair, priced at £35,000 to £55,000 a month over two to four months, with the price fixed in writing before it starts. It ends on a design and a sequenced rollout plan rather than on a retainer. If you would rather adopt the published model without engaging anyone, that is a good outcome and it is why the model is published.
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