Brian, I 100% agree (as a huge Trader Joe’s fan)! I actually didn’t realize how tightly-lipped TJ’s was regarding their operating model. As you point out, the simplicity to their vision/mission makes it easier to keep their business model & operations fully aligned (i.e., always prioritize value for price, and keep prices low). Some of their key operating decisions (e.g., fewer SKUs) also result in a ‘stress-free’ experience for both the consumer (i.e., easier to decide) & employees (i.e., easier to stock) which I think is key to their success. I’ve heard TJ employees/managers have extremely high satisfaction due to high salary & benefits, which also is an operating model decision that I think ultimately feeds into their vision of ‘high quality’!
Utsav, thanks for this food for thought (and for your ‘very humble opinion’ ;))! I wholeheartedly agree with your bottom line that aligning business and operating models are not the only ingredients to a successful org — these need to serve as the foundation to a strong and clear vision as well. In fact, my own start-up struggled with the same issue of a ‘moving target’ for a vision, which resulted in a confused business and operating model, even through several pivots. I’m curious though: is Twitter’s problem more just that it has reached it’s ‘peak’ for growth (i.e., the 300+ million monthly active users is 100% penetration of potential Twitter users) or truly that there is misalignment between business and operating model?
Z, this extremely interesting – in particular, in light of our recent related cases (Cynthia Carroll in LEAD and Kerr McGee in FIN1)! I agree based on your analysis analysis, Barrick Gold’s business model seems to capture value for its shareholders. However, I’m curious to learn more about your thoughts on how the company is evolving its operating model to serve the business value proposition of building ‘high quality mines’ and providing value to employees. As we discussed in our Anglo American case, what may drive revenues/profits in the short-term may not necessarily align with the longer-term sustainability of a company (e.g., social/global pressures to change the working environment for miners)