How do you build a Center of Excellence for Data, Analytics, and AI!

CoE .. we all cringe when we read the 3-letter word. How do you change the perception and build an effective center of excellence that has influence.

As a former Chief Data Officer, Chief Analytics Officer, Chief Data & Analytics Officer, and Chief Data & AI Officer, I’ve had the privilege and heartburn of being responsible for establishing a Center of Excellence (CoE) for my AI, Data, and Analytics practices.

There’s good news and bad news, there’s no one size fits all!

If you have the responsibility of setting up a CoE, here’s your foundational blueprint below. While it’s not a comprehensive list, there are a lot more nuances to take into consideration that only experience can bring, and not a newsletter, this will cover the 6 core principles to follow and what to consider:

1. Objective & Purpose: Are you building capabilities, operating as a service center, or a group that governs policies & procedures? Maybe, all of the above. Depending on your core purpose, the influence & impact of your CoE will fluctuate.

   1. In my experience, if you’re building or servicing, you’ll have stronger influence because you’re solving a problem.

   2. Governance-oriented teams will have a harder time in influencing UNLESS you’re in Manufacturing, in a Six Sigma oriented environment, or a heavily regulated industry.

   3. But no matter what, you have to know your purpose and what you’re building so you have clear objectives that you can outline for your boss, your team, your peers, and the businesses you serve. Make your deck simple and your diagrams clear on what it is that you do.

2.     Know the Pain Point:  You have to know what pain point you’re solving for, how you’re removing the pain point and why someone should add an extra step in their day and work with your team. You need that vision crystal clear, and you need to articulate it, repeat it, write it, and broadcast it to all your stakeholders, teammates, peers, colleagues, and more. Just when you’re tired of doing it, do it some more. People need to know what value you are providing & why. You need them to evangelize on your behalf when you’re not in room, but more importantly, so they leverage your team for the services you provide vs. ignoring your team. Add one additional step, make sure your team knows it too, inside and out.

3.     Your Team: Are you building a new team or rearranging a team you inherited? Do you get to make changes (if they are needed) or do you have to work with what you have? This is important because you need to align your team with the Skill/Will matrix., those who are willing to do the work and highly skilled.

• If you have someone who is willing to do the work and is skilled - they are gold.

• If you have someone who has the skill but not willing to do the work – make changes.

• If you have someone not skilled but willing to do the work - coach them

• If you have someone not skilled and not willing to do the work - make changes

• Your team is critical as they are the ones who create the impression and perception that you’re an effective branch of the company. Set expectations for your team and regroup weekly to better understand your shortfalls. You unfortunately have to be super high performers, to compensate for not managing a P&L and being a CoE (which already has a shaky reputation).

4.     Know your interdependencies: It’s important you know your interdependencies with other functions. This is KEY (and often missed)! You’re not operating in a silo so you have to build tangential links, if not direct links, to teams you have dependencies on.

• Assign a person on your team to be dedicated to that function. Their job is to know any updates, changes, or progress and make sure the processes set in place are operating as outlined in a SOP between your team and theirs.

• You also have to build a strong relationship with the head of that team so they get to know you, respect you, and understand the value you’re brining. It also helps avoid them going off on a tangent & making decisions that impact you, or worse, not including you in any discussions.

5.     Feedback Loop: You’ll always need a ‘LIVE’ feedback loop so businesses, functions, peers, teammates, etc can provide feedback on what’s working, what’s not, where response times are lengthy, what processes are well defined vs. confusing, etc. You need this to continue to evolve your structure and provide better service as a CoE.

6.     Your organizational model: This one is tricky! Whether the company is fragmented, federated, hybrid, or centralized, you have to find an organizational model that can meet the needs of P&L businesses, functions, stakeholders, peers, and more. Here’s what I’ve experienced, but tailor it to your situation:

o   Fragmented: unless you have endless budget, headcount, and free rein to build, avoid this model, even if the company insists. You can never scale and its hard to quantity your impact!

o   Federated: it can work, but it’s very labor & resource intensive and things can be often missed. If however, you need to follow this model, you’ll need dedicated teams in markets, regions, functions, and the business, and you’ll need great communication and PMO discipline to ensure each group in the federated model is aware and up to date with everything. I personally find this model exhausting because of how much work you have to do to stay in sync when running a global team.

o   Centralized: This can work in smaller environments where decision making is often made in the central. It’s the easiest to manage and less labor & resource intensive. However, this model stops working at a large enterprise because it’s too slow to meet the needs of each group AND it doesn’t have deep enough domain expertise to speak with a level of understanding. So you quickly can get ignored or bypassed.

o   Hub & Spoke: I find this the sweet spot. While it’s not perfect, it has worked in both medium and large companies. The goal is to set up a lean and mean centralized group that oversees the processes, protocols, governance, and capabilities; coupled WITH pods. The pods sit in the markets, regions, businesses, and functions. The pods can range from 1 person (if you’re only servicing a small function) to a team of 20 (if you’re supplying the entire data engineering function to the Finance team). The model is set up in that:

§  The center establishes best practices and builds capabilities.

§  The center is responsible for the career framework, professional development, and up-skilling of each person in a pod.

§  The center & pods work together to make sure everything built & established in the center, is shared and scaled to every group the CoE Services through the pods.

§  The pods however sit with the business, for all intent and purposes they act and operate as if they are in the business. The business sets their prioritizes and provides feedback into their performance reviews (even though the headcount belongs to you).

§  The pod also brings back to the center any issues, improvements, and successes so the center can further build upon that.

In summary, know that your #1 objective as a CoE is to be very clear on why someone should work with your team and what you bring to the table. Your #2 objective is to ensure there’s tight alignment with business priorities and solving for their pain points through your D&A team. Your #3 objective is spend time and build relationships so your CoE can be seen as a strategic hub that drives innovation, optimizes decision-making, governs key processes, and can unlock new sources of value across the organization by providing thought leadership, building data products, creating self-service capabilities, and more. Your #4 objective is to put in place a structure that scales so you’re in markets, regions, functions, and the core business. People need to know about you. And last but not least, your #5 objective is building a good perception by having teammates who are high performers, meet SLA’s, are responsive to requests (i.e. don’t sit on emails for days), and have a genuine interest in being service-based leaders.