Are Centers of Excellence a Fad or Path to the Future?

Companies currently focus on business transformation to help improve innovation, achieve agility, and better deal with disruption. According to KMPG, 93% of U.S.-based multi-national companies are undergoing some kind of transformation program. Companies that have undergone transformation have seen, on average, an 8% surge in profits.

Tackling and excelling at business transformation is easier said than done. As a result, companies are establishing Centers of Excellence (CoEs) for a variety of purposes. Centers of Excellence are not a new fad. Centers of Excellence have existed for decades, originating within the manufacturing world with an emphasis on improving factory operations. CoEs enable an organization to go beyond the status quo, enabling the organization to deliver and receive incremental value. They can, when properly created and deployed, be a path to driving tangible business results.

All CoEs rely on the expertise and focus on best practices, people, process, and technology initiatives to support a specific outcome. To be successful, your CoE needs clarity of purpose. The expected outcome dictates how the CoE is formed, deployed, and managed. It defines the expected results of the CoE and how the success of the CoE will be measured.

It is possible that your organization will need multiple CoEs to achieve various outcomes. Aim for a CoE to improve expertise in a specific area and make the most of your organization’s resources. The key to success for any CoE is that it drives action.  

When should you create a Center of Excellence?

If the status quo works for you, forgo the effort embodied in establishing a CoE. Create a CoE when you are trying to drive change. In their work, McKinsey found that “every transformation leaks value at various stages of the implementation process.” Based on a survey of more than 2,000 executives in 900 companies across industries, they found that the firms best at implementing a transformation are better at organization-wide ownership of commitment to change, regular and effective prioritization, and deployment of the right resources and capabilities. They claim that capability-building programs are crucial to any successful transformation. Hence the value of a CoE when it focuses on closing skills gaps and establishing standards and procedures.

For your Center of Excellence to work, the team members serve as guides to the organization. They must be the sherpas who help the organization reach their destination both faster and better than if the team was tackling the task solo.

Once you establish the need for a CoE, define its mission, and staff it, focus on where you can deliver quick and impactful wins toward the outcome. The best way to build momentum for change is to quickly deliver and celebrate wins.

How to Market Centers of Excellence For Growth

Think of your Center of Excellence as a special team. A group of people, from inside AND often outside the organization, who are specialists and bring a unique set of skills to the field. With the emphasis on growth and the role Marketing plays in achieving growth, it may be time to establish a Marketing CoE that defines and serves as a best-practices center, fosters standards, builds competencies, and incubates new processes and methods.

If implementing new Marketing Technology, revisiting processes, improving analytics, building models and dashboards, and/or addressing customer experience are essential initiatives for your organization establishing a Marketing CoE could be a good course of action. For any of these, your Marketing CoE will need to capabilities around research, benchmarking, guidance, establishing best practices and training/skills development. A Marketing CoE should enable your organization to use its Marketing resources more effectively, improve performance, and eliminate inefficient practices.

Because clarity of purpose is the foundation of a CoE, a successful Marketing CoE will work from a charter or mission statement and have a well-defined set of outcomes. Take this step first. This information helps establish the scope of your CoE, how it will operate, the type of talent and other resources the CoE will need.