Building a Culture of Excellence: CoEs in a Global Supply Chain group transformation

Let’s start with a working definition of a Center of Excellence: it can be a group of people with a high level of experience, enhanced skills in a specific area – either cross-functional or a single process.

Among the possible utilisations, I consider CoEs for organisational culture, RPA, AI for business, and Digital transformation. This guarantees a specific focus on the elements which are brought by people.

In my experience, even if we did not call CoE, but “Expert and support groups”, there is a logic to follow to get people with skills, experience, and capabilities, to transfer knowledge but also coach other people if required, and being a qualified bridge between people and technology when it becomes necessary.

Three stages are necessary to make CoE function effectively.

• Select and create a group of cross-functional people.

• Train people before or during the implementations or diffusion of elements for the destinations

• Have CoE supporting actively further organisational activities in scaling transformational or change initiatives with or without technology, sharing best practices and having thought leadership.

In the Global Supply Chain transformation, we created three diverse CoEs for each country, and within the Parent company, we included IT/ERP as the main point of reference for ERP, training, and instruction materials due to the poor knowledge level about the use and following exploitation of IT resources.

After eight months, we agreed to have a single CoE at a group level.

What were the reals goals of having three and then a regrouping CoE?

· Managing and sharing a New Group Culture without undermining single country’s values, beliefs, and behaviours.

· Sharing the first-hand experience of the organisational processes, best practices, reducing or eliminating the interference of the parent company.

· Aligning three groups around common goals (market shares retention, costs reduction, efficiency growth, working together in planning and scheduling as a single company).

But why culture first and the rest later?

Every Company has distinct leaders – Managing director in Italy, General Managers both in China and in Tunisia. Everyone is supposed to bring profit, productivity, efficiency, and quality to their companies. However, manufacturing processes and phases are different and manufactured goods are semi-finished and finished products with complications in quality requirements.

In addition, every leader needs to operate in the local culture, as no workaround applies. But at the same time, they need to count on local managers to create a group culture for a new Supply Chain maturity level.

The one-man-band, the single leader Managing Director from Italy who has delegated most of his power to the local GMs, failed to transfer what the group had to do to overcome financial and economic issues. Additionally, a diverse approach to collaborating wasn’t agreed on, using the push approach. Only.

Acting only with the GMs was a weak approach because the GMs could not transfer something different from the business’s local culture. And obviously, they were resistant due to their original expected activities.

This is why we created an ongoing CoE for each Company first, then a group CoE.

it was indispensable to eliminating a distance-blaming approach and to creating a mutual listening and exchange of support and proposal of best practices and approaches based on each Company’s previous experience and skills to clarify and discuss realistic expectations. In this way, members of CoE were able to return to their companies and share new group cultural values, justifying different behaviours coming.

Being profitable and increasing productivity through people and tangible assets is the goal of any business. These objectives should drive organisations to seek ideas to cut costs and perform operations more efficiently. Overestimation of leadership power from the parent company left the local leadership unable to manage the group and local culture, creating a mismatch between the concept and expectations from the local leadership and the group organisation reality.

The primary goal was to eliminate the silos approaches between the three companies, going beyond every individual business and managing local organisational culture, especially values, without mentioning the buzzword “excellence”, sharing a common value of being the best in producing micro-transformers for well-known customers. This is the purpose, which worked as a cultural glue.

The concept of CoE is often defined as shared high-performance expectations where different experts and representatives of departments, business units or group companies are willing to remove misunderstandings and resolve issues to reach top performances related to, in our case, group value and “brand” in b2B market, lead time, productivity, quality and efficiency.

We did this by reduce the leadership efforts to impose actions without sharing cultural values, using the Centre Of Excellence’s customised logic and purposes as a vehicle for cultural organisational and IT knowledge.

And we focused on people: yes, people-centric in this case study was put at the centre of transformational decisions, “forcing” the Italian Company to “listen” instead of judging from the top of their excellence and share the core value – the purpose of the group in a common language.

Some tricky & resolved issues.

We never spoke about “culture”: too risky? But we spoke about business values. Playing with words with different meanings and then “coding” in English was my most challenging task. I asked for support from two interpreters (Tunisia and China) to develop something acceptable by the parts.