Lean and Active: A New Perspective on the Role of the Centre

Abstract

All athletic movement begins at the centre. The hips provide the power that allows baseball players to drive a ball hundreds of feet, soccer players to kick a ball nearly as far and dancers to spring into the air in seeming defiance of gravity. Although it may appear that power comes from a flick of the wrist, a knee flexing or a calf constricting, those actions are the last of an integrated set of movements that begin at the centre of the body. Ideally, the corporate centre would have the same direct connection to the business units it supports, guiding their moves and powering their outstanding performance. In reality, however, the corporate centre rarely functions so gracefully. Bureaucratic and inefficient are two words that often describe the performance of the corporate centre. Today, its role is more relevant than ever. Globalization, technology and the speed of innovation are forcing companies to be increasingly nimble. If the centre sends out the wrong message, interferes with creative local initiatives or imposes bureaucracy, it actually destroys value. It is no wonder, then, that nearly all senior executives cite the role of the centre as one of the top five issues on their agenda. Over the past years, the “organization practice” of The Boston Consulting Group (BCG) has been striving to understand how the corporate centre, otherwise known as headquarters, can create value by shaping organizational behaviour and interactions, raising operational capabilities and improving overall performance. BCG regularly conducts centre-related research to spot new trends, issues and success models early on. This report is mainly based on a large research effort in 2006 and 2007. In addition, we refer also to more recent research and project experience, including the recent “Organization 2015” survey addressing organizational trends in Germany, Austria and Switzerland. In order to further investigate this field, we carried out various types of research.