EP197S06 Revolutionize Your Business – The Proven POTI Method to Transform Your Operating Model
What if 70% of business transformations fail not from bad strategy, but because leaders skip one critical step?
Today we’re unlocking the Target Operating Model (TOM)—the “strategic GPS” that Fortune 500 companies use to turn chaos into clarity and save millions. You’ll discover the POTI method, and I’ll show you how to apply it, whether you manage a team of 50 or 5,000.
#AdvancedQualityPrograms #TheQualityGuy #TOM #POTI
Imagine you’re running a car company. The board demands carbon neutrality by 2030. Your options: electric vehicles, renewables, recycled materials… each cost millions. Pick the wrong path, and its game over. Pick the right one, and you lead the industry.
Here’s where most leaders fail: they jump to solutions without truly understanding their current reality.
This is exactly where most leaders stumble. They jump straight to solutions without truly understanding their current reality.
A Target Operating Model, or TOM, is your strategic GPS. It shows you exactly where you are, where you need to go, and the most efficient route to get there. Think of it as the difference between wandering aimlessly in the wilderness and following a meticulously detailed roadmap.
TOM analysis doesn’t just give you one path; it explores multiple routes to reach your future state. Each route has its own trade-offs in terms of cost, time, and benefits. Some might be faster but pricier, others might offer more long-term value. This analysis empowers organizations to choose the most effective and efficient path forward.
Now, here’s where it gets truly practical: The POTI Analysis. This method breaks your organization down into four critical areas:
- P – PROCESSES: Your operational workflows and business models.
- Let’s go back to our car manufacturer. Their current state might involve traditional assembly lines producing 1,000 cars daily. Their future state? Automated, AI-driven processes producing 1,500 electric vehicles daily with 40% less waste. That’s a massive process shift.
- O – ORGANIZATION: Your people, structure, and culture.
- Current state: 2,000 employees with traditional automotive skills.
- Future state: 1,500 employees with advanced tech and sustainability expertise.
- The gap? 500 roles eliminated, 800 people retrained, and 300 new hires with highly specialized skills. That’s a monumental human capital challenge.
- T – TECHNOLOGY: Your systems, infrastructure, and equipment.
- Current: Combustion engine assembly equipment.
- Future: Electric vehicle production lines, battery manufacturing plants, and a robust charging infrastructure.
- The investment required? A staggering $2.3 billion over three years.
- I – INFORMATION: Your data, analytics, and reporting systems.
- Current: Basic quality metrics and manual reporting.
- Future: Real-time sustainability tracking, predictive maintenance, and sophisticated carbon footprint analytics to truly measure impact.
Here’s what most consultants won’t tell you: You must conduct separate workshops for each POTI category. Why? Because your finance team thinks differently than your operations team. Your IT department faces entirely different constraints than your HR department.
Pause this episode right now and ask yourself: Which of these four areas—Processes, Organization, Technology, or Information—represents your biggest transformation challenge?
Write it down. What you just identified is likely the make-or-break point for your transformation.
Once you’ve mapped your current and future states, the real magic happens in gap analysis. This isn’t just identifying what’s missing; it’s about prioritizing what must change, what can stay, and what needs to be completely rebuilt.
I use the RAG status system:
- RED: Critical gaps that could kill your transformation entirely.
- AMBER: Important gaps that need attention but won’t derail everything on their own.
- GREEN: Minor adjustments or areas that are already aligned.
For our car manufacturer example:
- RED: No electric vehicle production capability. This is a showstopper.
- AMBER: Workforce skills gap. Manageable with targeted training.
- GREEN: Quality management systems. Already world-class, minimal effort needed.
The key insight? You don’t implement everything at once. That’s transformation suicide. Instead, you create phases:
- Phase 1: Technology selection and design finalization.
- Phase 2: Infrastructure build-out (often overlapping with Phase 1).
- Phase 3: Staff training and system integration.
Each phase builds logically on the previous one, reducing risk and significantly increasing your probability of success.
Here are the three mistakes I see leaders make repeatedly:
- Mistake #1: Treating TOM as a one-time exercise.
- Reality: Your TOM should evolve as your program progresses. Market conditions change, technology advances, and regulations shift. It’s a living document.
- Mistake #2: Using only one presentation format.
- Smart leaders use both a table format for detailed tracking and a clear, diagrammatic format for high-level stakeholder communication. Different audiences need different views.
- Mistake #3: Letting perfect be the enemy of good.
- Your current state documentation will never be 100% complete. Start with what you have, baseline your future state, and iterate. Get going!
The organizations that truly succeed? They treat their Target Operating Model as a living guide that directs every decision throughout their transformation journey.
Your transformation success hinges on getting this foundation right. If you’re leading a major change initiative and want to avoid that daunting 70% failure rate, you need a robust TOM analysis.
If you want the POTI analysis templates I mentioned, or you’re ready to discuss how this applies to your specific situation, reach out through the links in the description.
Until then, remember: Quality isn’t just about products or services. It’s about the systematic approach you take to achieve your vision.