A final post in a series addressing some of the lessons and take aways from experience in establishing Centers of Excellence.
Every organization knows they have a responsibility to optimize financial resources. I don’t know of a business that does not have a CFO or the equivalent and appropriate staff. Most also have acknowledged the importance of their information resources and have a CIO or CTO organization. Most also realize that they need to effectively manage their human resources and have established a Human Resources department.
With processes being perhaps the most critical resource an organization develops, I wonder why most are less enthusiastic about optimizing processes and appointing a chief process officer. This officer would lead a Process CoE that focuses on two critical activities within the business:
- Optimize and Continuously Improve Existing Processes
- Create New Capabilities
Some organizations have addressed the first of these using six sigma and lean. I applaud Motorola and others that have embraced this as a practice, ideology and goal within their organizations. The structures and concepts of lean six sigma fully address the first activity. Motorola credits six sigma with delivering at least $16 billion in savings between 1987 and 2001.
But, it only addresses half of the requirement of a Process CoE. Motorola, as a case study, has demonstrated an extraordinarily difficult time adapting to changes in their business model and producing next generation products and capabilities. Witness the recent woes and impacts from the 3G cellular transition. This, I believe, is from their lack of focus on the second critical Process CoE activity, creating new capabilities. Despite the DMADV methodology within six sigma, few shops actively nurture capability development as an activity. This leaves them unable to successfully transition to the next strategy, market, or product.
Creating new capabilities first requires an organization to recognize that a new capability is required. This takes strong outward facing skills not honed in six sigma. It also requires the ability to create new partnerships, attract new customers, enable new value chains and master new processes, tools, skills and technologies. None of these are Master Black Belt competencies. I am currently working with an organization that is building an new internal capability, and I can say it is nearly as difficult a work as a start-up organization faces. (I say ‘nearly’ only because they have some existing structures that can be borrowed and fewer capital constraints than startups where I have worked.)
My vision of a Process CoE would expand on the six sigma foundation to nurture both of these critical activities. At the core of the center would be strong analytic problem solvers that would improve existing processes and design new ones. We would borrow heavily from IT, HR and other speciality resources when needed. Around them would be project, program and change managers that would stitch together the complex dependencies that would ensure readiness for working differently. And, sitting on top of that would be visionaries moderated only by an enterprise prioritization and resource allocation process. These visionaries would focus on expanding use of the organization’s core competencies and pushing leaders to explore new opportunities and relationships to keep the business relevant for an ever changing world. A truly agile enterprise would be the result.