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