Armin Cruz : Armin Cruz on the Value of a Circle of Excellence (CoE)

Armin Cruz on the Value of a

Circle of Excellence (CoE)

Armin Cruz is a Six Sigma Master Black Belt that specializes in LEAN methodologies in the financial transactional industry. Armin Cruz received his MBB while serving as a Vice President at Bank of America’s Process Excellence division. Armin currently serves as Director and Head of Continuous Improvement for a public firm in the financial real estate and property management industry. Armin Cruz earned his MBA from the University of Phoenix, and his BA from the University of Texas at Dallas. Armin Cruz lives in north Texas with his wife, three dogs and is anxiously awaiting his first baby boy in December.

If your business unit is decentralized and underperforming you may be tempted to consolidate the business unit under one leader, and define success as a CoE. However, before you take action, please consider reading this article. Simply moving the pieces on the chessboard will not create a strategy. In fact, more times than not, change for the sake of change, or because you think it is the right thing to do without a data centric model is a sure-fire way to cause significant signal to noise ratio issues.

Consider for a moment the pain that is causing you to consolidate into a CoE. More than likely you are experiencing variability in performance. If you have variability, consolidating a business unit (in and of itself) will not relieve this pain. In fact, you will shift the variability from outside the business units reporting to hidden with in the function. This is what we call noise in reporting, and can lead to an increase in signal to noise ratio, making reporting and action planning significantly more difficult to execute effectively on.

Consider doing a root cause study, as well as a LEAN time series study to determine the “why” behind the “what” of your business pain. After you have identified root level data points, you will be better positioned to embrace the problem solving methodology to ensure the CoE is well executed. As an aside, to understand how to solve business problems in 4 simple steps please search SlideShare for “4 Steps to Solving Business Problems.”

Then, after you cure the dependencies and root level issues, consider one more ancillary function. The power of a CoE rests not in the fact that a unit is consolidated, but in a cross-functional and fully integrated matrix environment. Consider adding auxiliary features to your CoE to ensure it is more robust. Some examples include a communications lead, HR business partner, procurement, logistics, process engineer, procedure writer, compliance partner, legal partner (can be shared service), operations consultant, as well as a business intelligence analyst. Combined with your Line of Business you will have a fully functional organically grown business unit that solves problems horizontally and will break down business unit silos. The incorporation of these auxiliary partners will only strengthen your model as they all embrace best practices within their industries.

For more information about this topic, please review and follow me on twitter with the handle @arminjcruz, or search About.Me for Armin Cruz. Additionally, I am on SlideShare; please search Slide Share for a presentation titled “4 Steps to Solving Business Problems” by Armin Cruz. You may also reach out to me on my personal website and request more detailed information.