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The Result
At its worst, the behavior that resulted was predictable. Many COE staffers acted first to protect their
areas of accountability by:
- Presenting themselves as the ultimate authority and decision maker;
- Dictating to business units what the units can or cannot do;
- Saying “no” without carefully examining the “what”; and
- Developing new enterprise initiatives without regard for whether they would help the
business units achieve their goals.
When the COE representatives displayed this attitude, business unit managers started referring
to them as the “corporate cops.” Needless to say, there was little value-added
from this relationship.
Over time, we have seen the more successful COEs add value in many companies by sufficiently
differentiating their strategic role from more operational or transactional responsibilities
and distancing themselves from a corporate gatekeeper role.
What has continued to be a challenge, however, is keeping pace with the speed and diversity
of business change. What the business needs most is the timely input of expert advice
to help accelerate business growth and change at critical points of impact. Without
this explicit business agenda, COEs tend to gravitate back toward the status quo and the
majority mean.
Place Your Bets on
Centers of Acceleration
When the COEs are allowed to shift their center of gravity away from the broader enterprise-wide
accountability, and toward the changing needs of individual business units, they can
thrive. To make this distinction even more clear to the organization, it is helpful to
think of these as Centers of Acceleration. COAs are agile and fluid in their focus,
responding directly to the changing business agenda. Their purpose is to provide
expert support to individual business units in a way that helps them accelerate growth
and change. COAs organize their work around short-term interventions in response
to and driven by business need.
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An Intention Gone Wrong:
A corporate IT COE’s mission is to ensure consistent enterprise wide definition
and methodology around technology architecture. This it does very well. But, when internal
technology-based applications and customer needs require that the technology is scalable
and configurable meeting a situational and specific business need, it puts tension between
the end-user’s need for customization and the COE’s need for clear roles, ownership
and accountability, calling into question who is actually responsible for what.
A Finance COE excels at providing general ledger services and enterprise-wide financial systems.
But when it is unwilling or unable to respond to a Product Unit’s request for specific
profitability analysis, the Product Unit is limited in its ability to grow products that
provide the greatest profit to the company.
A corporate HR COE has a compensation expert. She is equipped to develop complex executive
compensation schemes, considering tax law, regulatory concerns, internal equity, and external
competitiveness. But, when the business unit has a specific need for an incentive plan for
their sales force, this expert is not available to help because the enterprise-wide
initiatives take priority. When she finally is available, her top priority is overseeing
how the corporate incentive plans are administered by the business units.
When the helpful expert morphs into the person who assesses the business unit’s implementation
of the corporate program, who may have significant input into the evaluations of the business
unit or the individual managers, and who measures success solely by what works at the
enterprise level, the dynamic has changed. The business units quickly move into the mode
of figuring out how to please the corporate visitor while at the same time working around
the person and/or program to create something that better addresses their needs.
While the CEO may appreciate that corporate control is being exercised, the business
unit is making less progress, not more.
COAs succeed when they serve at the will of the business units who pull them into their
business concerns as needed. COA representatives succeed when they are empowered to
behave in a way that reflects an intense desire to understand the needs of the business unit,
to aggressively find a way to support that need, to work “in the dirt” with
unit managers to build the solution, and then to get out of the way and let the business
unit take the credit for its success.
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