RACI: does this “old-school” model still apply to business today?
RACI is a model that we, at Levant Consulting, use every day in the way we approach our operating model and organisation design work. It’s a model that has been around since the 1950s. That may beg the question - isn’t it a bit outdated? Aren’t there newer models out there that are more modern and relevant to the business world today? Our view is that the model is still valuable, and there are a few good reasons why.
First, let’s start with what on earth RACI is
RACI is a model that is used in several business contexts including project management, business process mapping, and operating model and organisation design. It is an acronym that stands for Responsible, Accountable, Consulted, and Informed and is used to provide clarity and structure when assigning roles and responsibilities. There are many versions of RACI including lots of three, four, and five-letter acronyms such as CARS, PARIS, CLAM, DACI, LRC, PACSI, and RAPID, but ultimately, they all have the same purpose – to clarify the relative role different parties play in relation to a task, process or set of responsibilities.
INSIGHT #1 – It’s not the model that you use that’s important, it’s that you’re using SOMETHING to help bring people with different perspectives together, to look at a problem using the same language.
RACI
R – Who DOES the work?
Responsible has the resources to do the work and get the job done.
A – Who is the CUSTOMER?
Accountable delegates responsibility to do the work to Responsible; they assign the work and sign it off.
C – Who HELPS you deliver?
Consulted has knowledge or resources required to get the job done, so they must be involved as a dependency.
I – Who needs to KNOW?
Informed is reliant on the work being done for them to continue with their work, so they need to be informed and are dependent.
How is RACI used in operating model and organisation design?
The terms ‘Responsible’ and ‘Accountable’ are used liberally and interchangeably in normal business contexts. ‘Consulted’ and ‘Informed’ also carry the same meaning for some people. However, when it comes to our operating model and organisation design approach, it is important to introduce and maintain a very precise definition and application of the terms. The model becomes ineffective if different participants are applying it differently, so establishing and maintaining your definition is critical.
Where do you start?
To use RACI, you need something to map it against. We use a value chain. A value chain is a way to represent what an organisation does – it is a model that depicts the full range of activities needed to create a product or service. A value chain typically reflects the top-level view of what an organisation does and is then reflected as processes below that.
This is an example of a basic retail value chain.
Using a value chain as our framework, we then map RACI against each step, applying some specific rules.
The rules we use when applying RACI
There can only be one Accountable. If there is more than one, it leads to duplication of work or no work at all.
Accountability is not the same as Responsibility. Responsibility for outcomes is delegated from the Accountable party, who requests the work.
Accountability flows up, Responsibility flows down. Responsibility for outcomes is delegated from the Accountable party. So, ultimately a CEO is Accountable for the end-to-end business and delegates Responsibility to their Executive. That process cascades down by level.
Don’t mark your own homework. Keep Accountability and Responsibility separate, or Accountability gets diluted.
Responsibility is not shared. Be clear on a single function or role Responsibility for OUTCOMES. Unclear delegation of Responsibility can lead to confusion, diffusion, duplication, and underperformance.
Being Responsible doesn’t mean you have to deliver every activity. Responsibility is for the outcome - to deliver any outcome, there may be lots of activities that need to be coordinated and delivered.
Consulted and informed aren’t a courtesy. These terms refer to Dependency, not Engagement. While we refer to “Consulted” and “Informed” as broad engagement terms, in operating model and organisation design they are more precise terms we use to denote dependency before (Consulted) and after (Informed) the fact.
There can be multiple C’s and I’s, but they all need to be managed. There can be multiple interdependent parties, but in defining that dependency, you are also highlighting the need for the Responsible to manage an interaction with that party. In our experience, ‘less is more’ unless you want to spend lots of time in meetings.
INSIGHT #2 – RACI is only a valuable and effective tool in operating model and organisation design if you consistently and deliberately apply the design rules.
Once you’ve mapped RACI, what’s next?
We use RACI for two key elements of operating model and organisation design.
To better understand how things work today, we work with our clients to map the current state RACI and apply our ‘rules’ to see where there are potential issues.
See the example value chain below with corresponding RACI mapped. There are several apparent issues.
Marketing the business
General management is accountable and responsible for marketing the business. We do not recommend that a function is both accountable and responsible as it means that appropriate governance cannot be in place to ensure the relevant outcomes are delivered.
Selling work
Business development and Account management have responsibility for this step. This ’shared’ responsibility will likely be resulting in duplication of effort and confusion as to who is doing what.
There is no function informed which may be possible however it is unlikely that no other function is reliant on selling work.
Improve and innovate
Whilst Operations are accountable for the Improve and innovate step, there is no function responsible. This suggests that the work is not getting done as no function is on the hook for the delivery of the outcome.
INSIGHT #3 – RACI enables visual evidence of challenges in an operating model which is hard for stakeholders to dispute.
We also use RACI to design the future state operating model where we work with our clients to map a target state RACI, ensuring that the ‘rules’ are adhered to, and address the current-state challenges or pain points. This work is then used as a key foundation for organisation design
So why RACI rather than any other models?
When we first raise the fact that we use RACI in our organisation design approach, we ask a client whether they have heard of it. 9 times out of 10 they have, and this is why we use it – it’s important to our design approach to have engaged participants, so we choose to use a model that clients recognise. Further, the simplicity in the model works in its favour – we can orient our participants and quickly have them actively participating in the process. An organisation design process can be quite complex, so having a simple, accessible model to support the process is invaluable.
In our experience, this saves time that can otherwise be spent on seeking to ‘speak the same language’ as part of the design process.
INSIGHT #4 – RACI might be an old model but if it ain't broke, don't fix it.
Conclusion
So, if you’re on an operating model or organisation design journey or you have simply been asked to map roles and responsibilities for a project, consider using RACI.
If you’re a bit stuck and don’t know where to start, reach out to us. We have a great value chain and RACI template we can share with you.
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