With a broad portfolio of products, a global medical device maker captured over 50% of sales in most of its categories in the US, where employees were organized by product divisions. In Europe, however, the company lagged behind competitors in sales partly due to a decentralized operating model that didn't align with the company's US operations. Its businesses in Europe were focused on individual countries, with little collaboration among them or with the US business, and suffered from lack of clear ownership for vital functions like sales and marketing.
An operating model serves as a blueprint for how resources are organized and operated to get critical work done. It encompasses decisions around the shape and size of the business, where to draw the boundaries for each line of business, how people work together within and across these boundaries, how the corporate center will add value to the business units, and what norms and behaviors should be encouraged. By optimizing through a new regional operating model that improved efficiency and helped the company achieve share levels in Europe that matched those in the US, the medical device maker stood to gain hundreds of millions.