The field has produced more than a dozen names for "operating model" in the past five years. Most describe the same underlying thing — how an organization translates strategy into running operations — viewed through whatever lens dominated when the label was coined. The proliferation is itself a signal. The traditional construct could not absorb the new realities — cloud, product organizations, software agents — without a rebrand each time.
This is a practitioner's map of the labels: what each means, who uses it, and when it actually fits. One warning up front. The label is downstream of the design. Every model below still has to answer the same four questions — WHAT work gets done, WHO does it, HOW it runs, and WHERE it happens. A new label does not change the questions. It changes which question gets the spotlight.
The umbrella term
Target Operating Model (TOM). The dominant label, used by McKinsey, Bain, BCG, and most enterprise advisory firms. A TOM is the to-be design of how an organization runs to deliver its strategy — the translation layer between strategy and execution. Operating model without "target" usually means the as-is; the TOM is the as-designed.
Same construct, scoped differently:
- Future Operating Model — a TOM with an explicit forward horizon, common in retail and consumer.
- Enterprise Operating Model — TOM at full enterprise scope rather than a single function.
- Group Operating Model — TOM across a multi-entity holding structure, where the live question is what the corporate center owns versus the operating companies.
- Operating Model Redesign — the engagement, not the artifact; the work of moving from the current model to the target.
When it fits: any time you are designing the to-be state across functions. This is the default umbrella, and the subject of the Rethinking the Target Operating Model series — which opens with why four out of five redesigns failed for a decade, and what brought the discipline back.
The structural reorganizations
These reorganize WHO does the work and HOW it flows.
Agile Operating Model. BCG's 2018 framing. Capacity-based funding (money flows to standing teams, not projects), flatter spans of control, and team-level autonomy. The dominant modern label from roughly 2020 to 2024. When it fits: when the bottleneck is speed and the organization still funds projects instead of teams.
Product Operating Model (POM). Currently the most common modern label. Organizes the firm around durable products rather than functions or time-boxed projects. The literature names three dimensions — Delivery, Discovery, Direction. Marty Cagan and SVPG are the canonical references; public adopters include Hyatt, Ascension, and Condé Nast. When it fits: when the work is digital product work and the organization is still structured in project teams that assemble and disband. Practitioner note: powerful for software-centric organizations, routinely oversold for operations-centric ones. A finance shared-services center does not become a product organization by renaming its teams.
Agile Product Operating Model (APOM). Scrum.org's specialization — a Product Operating Model with agile method baked in. When it fits: rarely worth distinguishing from POM in practice unless you are certifying teams against a specific framework.
The firm-branded umbrellas
These are vendor banners more than distinct constructs.
Next-Generation Operating Model. McKinsey's umbrella term for digital-era models that integrate continuous improvement and advanced technology. Less a distinct model than a banner over the firm's modern TOM work.
Future-Fit Operating Model. EY's term, organized around five capability areas rather than structural layers, and deliberately positioned as a rejection of the people-process-technology taxonomy the other firms use. Distinct enough to matter if you are reading an EY proposal — the firm-by-firm differences are mapped in what MBB and Big 4 actually deliver.
The AI-era frame
These reorganize around agents as participants in the work.
Agentic Operating Model. The newest label, emerging in 2025–2026. Structures the organization around AI agents as active participants rather than tooling layered on top. Berkeley's Governing the Agentic Enterprise (2026) and McKinsey's The Agentic Organization (2025) are the foundational references, typically structured around four interdependent layers — Cognitive, Coordination, Control, and Governance. When it fits: when a meaningful share of execution is moving to agents and the human role design has to change with it. It is the coming inflection the Rethinking the Target Operating Model series builds toward.
Composable Operating Model. Pairs with the agentic frame. Emphasizes modular, API-driven architecture that can be reassembled without a full redesign. When it fits: as the technical substrate underneath an agentic model. Rarely a standalone choice — it is the how that makes the agentic what possible.
How the labels stack
The labels are not mutually exclusive. They layer. An Agile Product Operating Model is a Product model with agile method. An Agentic model usually assumes a Composable architecture underneath. Most real organizations are a blend — a product operating model in the digital business, a classic functional TOM in finance and HR, agentic pilots in a handful of high-volume processes. The label that matters is the one describing the dominant driver in your situation, not the one with the most momentum in the press.
The practitioner's bottom line
The label is a lens, not the model. Whichever one you adopt, the design still has to answer WHAT, WHO, HOW, and WHERE; reach task level; run on a cadence; and have named owners with authority. A team that adopts "Product Operating Model" without those has renamed the org chart.
The useful question is never "which operating model label should we adopt." It is "which driver dominates our situation, and what does that change about how the work actually runs." Pick the label that names your real constraint. Ignore the rest.
For the design discipline underneath all of these labels, the Rethinking the Target Operating Model series is the place to start. The broader frame they all sit inside is operating model architecture.
Key Takeaways
- The label is downstream of the design — every operating model still has to answer the same four questions: WHAT, WHO, HOW, and WHERE.
- Target Operating Model is the umbrella; Product, Agile, Agentic, and the rest are lenses on the same underlying thing.
- The labels stack rather than compete — most real organizations run a blend across functions.
- Pick the label that names your dominant constraint, and ignore the rest.