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This year almost every leadership team is redrawing its organization for AI. But as of now, the return has not yet followed. Only 25% of organizations say AI is having a transformative effect on their company, and 37% have deployed it at a surface level, with little or no change to the underlying business processes.
A new org chart is quick to draw, but often not understood as part of a deeply entrenched operating model that must be evolved as well.
A new org chart is not a new operating model
An operating model can be understood as the set of decisions a business can take, the level they get taken at, and the metrics that reward them. In many cases, when only the reporting line is redrawn, decisions still get made where they always did.
The value chain, with clear ownership end to end
The organizational structure, the boxes and reporting lines
The planning and prioritization rhythm, i.e. how the business decides where resources go
KPI ownership, determining who is measured on which outcome
The test comes a year after sign-off
A year after the target operating model has been amended, the question worth asking is whether decisions are actually being taken at the level the model assigned them to.
The measurable version of that question is where each decision is taken this quarter against last, and whether the resources followed. Moving decisions is what reaches the P&L. Moving boxes does not.
We lay out the full approach, from as-is analysis to the year-one test, in Target Operating Model: The Ultimate Guide.
3 questions before you sign off your new target operating model
Decision rights: Name 3 decisions that will be taken at a different level next quarter than they are today. If you cannot, only the chart has changed.
Ownership: Who owns the P&L for each redesigned unit, and does that owner’s KPI set reward the outcome you reorganized to get?
Rhythm: Did the planning and resource-allocation cadence move with the structure, or only the reporting lines?
Weekly Picks
Harvard Business Review, How Agentic AI Supercharges Startups and Threatens Incumbents (Jul-Aug 2026): Lee, Mantia and McNeill argue a new operating model compresses the time and capital needed to build a company, and that incumbents held back by siloed data and rigid roles have to redesign processes before automating. The clearest recent statement of why this is an operating-model question, not a tooling one.
MIT Sloan Management Review, The Real Question to Ask About AI Governance (2026): cuts straight to decision rights: when an AI model does something it should not, who in your organization has the authority to stop it, and do they have real authority? If you cannot answer that, you are doing governance theater rather than owning the decision.
Forbes, Why AI Requires a New Enterprise Operating Model (17 July 2026): Kramer frames the shift from systems of record to systems of action, and argues the answer is a single operating model linking systems, decision rights, controls and human judgment. A useful plain-language companion to the argument in this edition.
Stefan
Founding Partner scaleon
scaleon
Build for growth.
The questions this newsletter raises are the same ones our clients bring to us. Which AI initiatives deserve a second round of investment? Where does P&L accountability for digital transformation actually sit? How does technology deployment translate into measurable business value?
scaleon works with CEOs and investors of digital businesses on exactly these questions - in growth strategy, operational management, and transaction preparation.
If anything in this edition is worth a conversation, we'd welcome a direct message.