When working on Business Improvement Deployments with larger clients we are almost always asked “Should our Business Improvement team have a centralised or a decentralised structure?”
The answer is “it depends”. First lets take a look at what we mean by the two structures.
A centralised structure is typically where the Business Improvement coaches are based in a central location. This is usually corporate based (in practice, often head office). The concept is the central Business Improvement team have a hopper of projects that are ready to be worked on as and when resources become available. The business Improvement Coaches report through to a Business Improvement Manager, that is part of the Executive Management Team. This provides the link to business leadership and the business strategy.
In a decentralised structure the Business Improvement Coaches are based at various locations in the business. Usually they will report to a Production or Line Manager and takes direction from them. The dispersal of the BI Coaches mean that a large Centralised Business Improvement Team no longer exists although there is usually a small central team to support training and other activities that are common across the company.
The Good and Bad of each approach
First up the centralised approach:
Having a team of central BI Coaches allows the business to pool resources and use those resources on the best projects to deliver high value for the business. This could result in all the coaches working on projects in a single business unit or they could be dispersed across the business units. Due to the coaches being centrally based, project progress is easier to track and manage progress enabling corrective action and help to be available if a project is moving off track.
One of the goals of a successful deployment is to get Business Units to ‘pull’ the services from the centralised BI team. Think of an internal team of consultants that will tackle a business problem when requested. Unfortunately in practise this is a difficult state to get to. We have found if the BI coaches are not at the Business Units and seen at the Business Units then the Business Units will not request (or pull) the services of the BI team.
Easier to ensure Coaches work on the important business wide projects.
Easier to manage the Coaches workload.
Easier to up skill coaches with training etc.
Business Units need to be ‘encouraged’ to use the centralised team
Reaction time to get a project up and running is slower
Harder to get senior management engagement in Business Improvement
A Solid Project Pipeline is required
The Decentralised Approach:
With the decentralised Approach the Business units tend to be happier with the Business Improvement Coaches under the Business Units direct control. The coaches are on hand immediately to deal with any problems that need to be addressed.
Quicker to react to issues as they arise
Business Units feel more in control of what the Business improvement Coaches are working on. As a result Business Units are much more positive towards the BI efforts.
Business Improvement Coaches tend to be ‘drawn into’ administrative duties. We have often seen BI coaches placed in charge of departmental KPI’s instead of adding value by running designated BI projects.
Business Improvement Projects become Business Unit focused rather than working on projects that are the best for the business.
Whats the best approach then?
Like we said at the beginning of this post, it’s a case of ‘it depends’.
We have found that the centralised approach is the better approach, however it requires;
Strong leadership to ensure that operations are using the BI Coaches.
A full Project Pipeline of important Projects that will deliver real value for the business.
Regular frequent promotion of the BI team services to operational areas of the business
While we prefer starting deployment with the centralised approach, we are pragmatists and understand that some organisations operate with the decentralised approach. We have worked with many companies using the decentralised approach successfully, in fact some of the most successful deployments we have been involved with have been decentralised.
We usually propose that a deployment starts out centralised and then move to a decentralised structure as the Business Improvement journey matures.