With the right purpose and mission, a COE can transform the way a given business operates relative to its people, processes, systems, strategies, and even its capital platform. In the coming years, builders will find it difficult to consistently find, attract, hire, and keep enough top talent to fuel growth in the current business models. A well-run COE that is focused on solving the workforce challenges of tomorrow could create a series of game-changing improvements in the builder’s business model that touch everything from process innovation that increases staff productivity by 50% to an “employer of choice” strategy that has top talent fighting to get in the door. Most builders likely would view these two outcomes as adding significant value to the business.
Be Honest About What the Company Needs
Challenge your team to start with a brutally honest assessment of what the company needs most in its business or where it is closest to failing in the most critical ways. Put another way, determine what the most significant risk to the company’s continued success is and look for a way to structure a COE around not only mitigating that risk, but turning it into a success as quickly as possible. Examples of some general outcome areas that could serve as focal points for COEs include: customer experience, employee engagement, business velocity, growth strategy, product development, and management. While one or more of these areas might make sense for you, you may realize that there is another focal point that will be more impactful for your company.
Here are some characteristics of successful centers of excellence:
Collaboration Among Staff COEs operate on the general principal that “more of us are smarter than one of us” or “the right group of people, skills, capabilities, and drive will deliver a result that nobody could have envisioned.” If your team is not accustomed to working collaboratively in a team environment, some education about collaboration is probably a good place to start the process. This also means that most COEs will be cross-functional. They will have team members from the purchasing, production, sales, marketing, and customer service engaged in collaboratively creating a better company for the customers, suppliers, employees, and owners.
Focus on Process Organizations tend to react to challenges in different ways according to how their various cultures work. Successful COEs develop a process culture within their scope of work. This means that as they analyze and innovate, they will consistently seek simpler, more consistent, repeatable, and automatable ways of executing the various work streams in the home building business. This is a process focus.
Focus on Measuring Desirable Outcomes Since COEs are not typically staffed by people who work in the COE or on the COE full time on a permanent basis, the discipline of measurement and having a clear understanding of the outcomes that the COE has committed to creating is critical for every member.
Focus on Innovation It is important to note that innovation is a requirement for the COE. In other words, you probably don’t have to go to the trouble—or expense—of creating a collaborative, cross-functional team to deliver incremental results.
Long-Term Plans Given that COEs should focus on business outcomes that are sufficiently important, valuable, or risky to warrant such significant attention and investment, it stands to reason that they would exist for more than a couple of months or quarters. Specific COEs are not necessarily permanent fixtures of the organization, however. Once established, the discipline of COE development and management likely will perpetuate to a large degree.
Centers of excellence have been successfully deployed in many industries to help drive innovation across organizations. Our industry has not yet embraced the concept. With the continued acceleration of customer expectations, information availability, design technology, and other external and internal challenges, the time is ripe for the builders who are willing to take a hard look at how they do business to harness the power of COEs to move their business ahead of its competition.
