Levelling Up the Centre of Excellence

 

Is the Centre of Excellence (CoE) still relevant? If so, how is its role changing, and how do we level up its capability? What are the biggest blockers & most common failure modes? What are the countermeasures? Such are my topics today & over the next few weeks.

What’s the Role of the CoE?

I’ve worked with CoEs for a couple of decades now & have seen them evolve in different directions. The CoE (aka Centre of Expertise/Capability/Competence, Maker’s Space, Digital/Innovation Hub) should act as a networking mechanism that helps us move from disorganized, siloed work to focused, aligned, informed and value-added work. The CoE’s core functions comprise five key pillars:

1. Standardize & Share Best Processes & Methods

·       Function as the ‘hub’ for a specific area (like Lean/OpEx, Innovation, Cloud, AI).

·       Define & share our current ‘best ways.’

·       Ensure we’re aligned across the organization.

·       Ensure quality of learning & application.

2. Build Knowledge & Capability

·       Identify key knowledge gaps: what ‘should’ we know vs what we ‘actually know.’

·       Sustain ‘Book of Knowledge’ summarizing applications to date & what we learned.

·       Upskilling & Coaching: Providing ‘learn by doing’ training, mentoring & "train-the-trainer" programs.

·       Share Learning by developing communities of practice (CoPs) sharing cross-team wins & losses.

3. Lead, Align & Connect

·       Define Vision & winning logic for a specific technology or capability aligned with company goals.

·       Thought Leadership: Wise direction; evangelize new ways of working.

·       Change Management: Support new ways of working by managing stakeholder expectations.

4. On-Demand Support

·       Advice for complex or high-risk projects.

·       Provide access to scarce or high-demand resources (e.g., Cloud, data scientists) that individual teams can’t otherwise access.

·       Methods & Tools: Oversee selection, implementation, and optimization of shared platforms.

5. Create Value through Innovation & Continuous Improvement

·       Piloting New Tech & New Ways of Working: Pilot innovative methods or technologies before full-scale deployment.

·       Continuous Improvement: Root-cause problem solving to constantly refine processes & methods.

 

How Is the CoE’s Role Changing?

Ambidexterity

The explosion of new ways of working, including Digital technology & methods has put intense pressure on the CoE (& everyone else). Ambidexterity is Job One – we have to become ‘two-gear’ organizations able to a) Protect our core business with Lean/OpEx, and b) Ignite new Growth with Digital methods. (For more on ambidexterity check out my blog & books).

Ambidexterity is especially important for the CoE. Here’s a recurring scenario: we jump to an expense Digital solution (e.g. RPA or Agentic AI) when a Lean/OpEx solution would be quicker, better & cheaper. The reverse scenario is also common: We commission a Kaizen event when we really need Growth Hacking. The net effect is the same: the CoE loses credibility.

Some organizations try to address the problem by setting up parallel CoE’s – one focused on Lean/OpEx and protecting the core business, the other on Digital methods (Cloud, Data, AI) and Growth. This can work if there is strong alignment & cross-fertilization between teams, but the risks are obvious. Business transformations almost always begin with fixing the foundation with Lean/OpEx. This essential work typically entails dozens or hundreds of process improvement events. Doing such work positions the CoE for the next part of the journey – automation & digitizing the new process. Splitting this work between two groups short-circuits ambidexterity. The proverbial left & right hands are disconnected from the start.

Towards an Ambidextrous CoE

Protecting the core business with Lean/OpEx & igniting new Growth with Digital is hard because each entails different mindsets & skillsets. In fact, they reside in two different worlds, first articulated by Aristotle. (See my articles on Contingency & Necessity).

How do we build a CoE comprising individuals at home with the mindsets & methods each world? How to build a CoE that can both protect the core, and ignite new Growth? Stay tuned.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

First We Make the Tool – Then the Tool Makes Us

 

I paraphrases McLuhan paraphrasing Churchill. Both knew something about shaping human consciousness. Half a century ago we began an extraordinary experiment by making the personal computer widely available. With Agentic AI, we’re entering a new phase. What would McLuhan & Churchill say?

The Strange Case of Norway

In 2016, Norway gave every child in the country their own iPad or similar digital device. Today Norway is restricting and/or banning digital devices from primary schools. Their rationale: declining literacy & cognitive ability, distraction & reduced focus, and declining social & mental health.

Are we not running a version of Norway’s experiment in private & public organizations around the world? There are two hypothesis in play here:

1.     IF we provide our people with AI tools, THEN we’ll create value – smarter innovation, better processes, higher productivity & quality, happier team members & customers.

2.     IF we do not do this, THEN we’ll fall hopelessly behind.

What Could Possibly Go Wrong?

First we make the tool, then the tool makes us. How does AI make us? On the plus side, AI saves time & effort. In earlier blogs I’ve described how AI agents can free us from the tyranny of the ‘How,’ so we can concentrate on the ‘What.’  I’ve described how AI agents enable our innovation sprints, freeing us up to focus on the ideal product, service, and customer experience.

Will AI & AI agents degrade our ability to think & to create?

Will we see a repeat of Norway’s experience in our public & private organizations? AI is a boon to lazy, dishonest, and unimaginative. Why write, draw, compose, imagine something when you can steal it? We’re seeing AI’s devastating effect on creator economies. Will art & creative endeavour become extinct? It’s no longer an unimaginable question.

There are notorious Tech execs, for example, who boast about ‘gamifying’ music creation. Why play an instrument when you can scrape all the music ever created, pour it in into the gaping maw of your AI, and charge a monthly fee for access? ‘Making music is too hard,’ a Tech Socrates opined recently. ‘You have to learn an instrument & scales, and you have to practice. Our app makes it really easy.’ A similar process is unfolding for essays & other long-form writing, journalism, graphic arts, novels and short stories, and film.

Use It or Lose It

AI & AI agents can make us stupid. How to sustain our edge? Do it yourself – with the help of your AI assistant. Building on earlier articles, we must recognize that AI agents are akin to the big blue Genie in Disney’s Aladdin. They're capable of handling the ‘How’ but hopeless at the What & Why, which is where humans excel. In my view the centaur metaphor – human + machine – remains optimal.

Humans should therefore focus on the What & Why, which includes building alignment around a shared vision, and on deploying the plan to the front line. Humans must build the management system that enables fluid responses to emerging issues, and the front-line capability needed to continually solve problems.

We should engage our big blue Genies in the How, where they excel. And we must continually exercise our cognitive muscles by solving strategic management problems as they arise. The OpEx/Lean and Innovation fundamentals described in my blog, and books remain valid and essential. We just have an eccentric but highly capable new team member to help us.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Lean Pathways Blog Milestone – 1,500,000 Visits

 

My blog hit a milestone last week – 1,500,000 visits. I started writing in early 2013, tentatively, not understanding the medium, and facing a heavy work burden. My marketing sensei, the splendid Holly Simmons, suggested a weekly blog: “You say you want to share what you’ve learned? Well, what are you waiting for?”

                        Pascal's Ikigai: Mentor, Create, Have Fun

Fourteen years later, I’m still at it.  Blogging is a way of sharing & checking my thinking.  ‘Does this make sense. Am I on the right path?’

I’ve pivoted a number of times, based on fresh interests & new learning. The past several years I’ve been telling the story of my adventures in Singapore & other innovation hot spots. It’s been a nine-year journey working with my colleague, Laurent Simon, in new geographies and industries (Insurance, Banking, Consumer Goods, Energy). I’ve learned that ‘Ambidexterity’ is the leader’s Job One. We must both protect the core business with Lean/OpEx and ignite new Growth using Digital methods. AI only intensifies the need to do so.

My pivot initially caused confusion – I thought you were a Lean guy. Indeed, cost reduction & avoidance through Lean/OpEx provide lasting value - but it’s no longer enough. As Noriaki Kano taught, ‘Delighters’ decay and become ‘must haves’. Lean/OpEx is a necessity, but it’s no longer a Wow. My job is teaching ambidexterity to leaders. In keeping with my ikigai, I have a foot in both camps. Mentor, Create, Have Fun.

Thanks for reading,

Pascal Dennis         E: pascal.dennis@leansystems.org

Strategy & Agentic AI – This Changes Everything

 

We’re wrapping up one strategy cycle and beginning another. The leader team is capable, smart & funny, and pushed each another in a healthy way. (I’m their teacher.) This is the first year we’ve seriously applied Agentic AI. What are we learning?

Strategy = What, Why, How

What are we trying to achieve? Why do we want to do this? How do we intend to do it? Strategy entails answering these questions with stories and making discrete choices. “We are going to play here, and not there. We are going to this – and not that. We need this kind of management system and those capabilities to pull it off.”

How has always been our biggest constraint, no? Do we have the data, manpower, and analytical horsepower? Can we grasp & master the complexity in the market, and in our supply chain? Can we anticipate & coordinate changes in demand & supply, while levelling up the performance of our people, machinery, and value streams?

Escaping the Tyranny of the How

How does all this change in an AI world? AI agents make the How much easier. Case in point: igniting new Growth is a core theme in the strategy sessions I described above. Key tactics entail selling existing offerings in new customer segments, and new offerings in existing markets. We have a ton of historical data and related content on the customer, what do they value, and why do they buy, including a rich catalogue of social media content.

If only we could repurpose this treasure trove and thereby run quick experiments to validate our Growth hypotheses. But how are we going to do this? Such work requires judgement & experience. We can’t hire more people and there is a ton of other work to do. Our Growth-related teams are facing burn out & morale may become an issue.

The senior team expressed all these concerns & clearly felt the tyranny of the How. But the How was no longer our constraint. In fact, we able to engage young AI-savvy team members who easily built an elegant AI agent that does the heavy lifting. The AI agent scanned our voluminous inventory, clipped relevant content, and developed necessary templates, and posting schedules congruent with the projects at hand. Taste, finesse and judgement were needed of course to curate & mold the content into a coherent experiment plan. Now we have to execute the needed sprints with intelligence, reflect on results & pivot as required.

Shifting Constraints - From the How to the What

In other words, the strategic focus is shifting from the How – to the What. The constraint is now our imagination, experience, taste, and business savvy. It’s as if we’ve found a magic lantern, rubbed it, and are confronted with a big blue Genie – who will take care of the How. ‘Your wish is my command.’

And so, the constraint is now: What do we really want to do? What’s our shining city on the hill? What does success look like? What’s our ideal condition?

What does all this mean for us? For a start, intuition, taste, and business savvy will become invaluable. AI agents are like very smart research assistants. They’re great at the How but not so good at the Why or the What. Savvy business leaders, by contrast, intuit their customers & market, supply chain & factories, partnerships and relationships with regulators, universities & other important players. They have good taste and know that ‘This will fly, but that will not – unless of course, we make these kinds of changes and present them in that way.’ This is what I mean by taste – knowing how to do, knowing what will fly and what will not.

Do we appreciate how big a shift this represents & the implications for leaders? On a personal level, my role as a teacher & mentor is evolving into curator of taste, shaper of what’s possible, and nurturer of the imagination.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org