How Does Operating Model Work?

An operating model is like the recipe and instructions that tell a company how to make its food (products or services) every day.

Imagine you have a lemonade stand. You know how much sugar, lemons, and water you need for each glass of lemonade. That’s your recipe, what goes into making the product. But you also need to know when to open the stand, how many glasses you can make at once, and where to put the money after selling a drink. That’s like the instructions, how things work behind the scenes.

Your recipe is like the ingredients, what makes your lemonade taste good. It includes:

• The people who help you (like your friend helping you squeeze lemons)
• The tools you use (like a big pitcher or a small cup)
• The supplies you need (lemons, sugar, water)

Your instructions are like the rules of play, how you run your stand. They include:

• When to open and close
• How many glasses you can make at once
• Where to put the money after each sale

Just like your lemonade stand needs both a good recipe and clear instructions, a company uses its operating model to make sure everything runs smoothly every day.