How to Sunset a COE (& What Not to Do)
We’re seeing a growing trend of leaders exploring the best approach to reposition their priorities, policies, investments, messaging, and resources around centers of excellence (COEs).
Brands are making headlines daily around their choices to continue to divest of various types of COEs, which is causing significant business disruption, job loss, employee dissatisfaction, negative press, brand boycotts, and even investor lawsuits.
It’s got us thinking, what is the best way to sunset a COE?
Over the years, we have helped stand up several COEs around data and analytics (D&A), change management, marketing product management, and diversity, equity, and inclusion (DEI), which often erupted out of a clear business need to better serve consumers, create efficiencies, improve workplace experiences, or generate innovation.
Each COE follows a similar maturity curve of hiring industry experts, uncovering feedback, aligning business goals, gathering enterprise-wide resources, creating a governance structure, establishing standards and best practices, setting key performance indicators (KPIs), developing new capabilities, creating a cultural and mindset shift, sharing knowledge,implementing tools, and developing talent across the company.
Yet, one little discussed stage of the maturity curve is what happens at sunset – as most COEs are not meant to live on indefinitely within an organization.
Companies may choose to sunset a COE for a number of reasons such as:
It’s met business goals in developing and integrating new capabilities.
There’s a shift in strategic priorities.
There’s redundancy with other initiatives or functions.
There are financial constraints such as budget cuts that force reprioritization.
There’s external legal or political pressure that puts other parts of the business at risk.
There’s been a lack of measurable impact on business outcomes.
Depending on the reason for sunset, organizations have several options to transition a COE such as:
Becoming a stand alone department,
Merging with another department,
Becoming an internal consulting service,
Transforming into a research and development hub,
Spinning off into a separate entity or business, or
Disbanding and abandoning the effort.
Making the decision to sunset a COE – even with a strong business case – can often come at a cost such as employee dissatisfaction and disengagement, loss of trust and credibility in leadership, resistance to change, lowered productivity and morale, and damage to the company’s reputation and relationships.
We’re seeing this play out in real time within the news.
In the absence of clear messaging as to why organizations sunset a COE, actions tell a story:
Integrating the COE into another department tells us that it's part of the future direction.
Pulling funding tells us that the efforts are not a priority.
Laying off entire teams tells us that we don’t value the COE talent, acumen, and capability.
Pressuring COE members to leave on their own accord tells us that it’s not part of our values.
Publicly announcing COE elimination tells us that we’re signaling to the market.
Saying one thing and doing another tell us that our values and marketing are not aligned.
So, how might a company sunset a COE in a way that aligns teams to new priorities, creates a vision for the future, keeps employee satisfaction high, and avoids business disruption? With thoughtful change management and communications.
The core tenants of any sensitive change apply here:
Assess the current state, define the future state landing zone, and evaluate potential impacts.
Map impacted stakeholder groups to define a plan to communicate and support.
Ensure alignment across leaders and providing coaching to lead with courage.
Co-create the transition with change advocates.
Create a coordinated plan to sequence and cascade authentic internal and external communication.
Empathize and support individuals through personal role and career transitions.
Create forums for feedback and flexibility for iteration.
Underestimating the value of change planning and communication can land businesses in hot water with employees, consumers, investors, and more. There are many cautionary tales splashing headlines and taking over social media feeds right now.
As businesses make the tough decision to sunset COEs to address various concerns, business leaders have a tangible opportunity to fold principles into the fabric of the day-to-day:
Celebrate the COEs accomplishments and progress while expressing a continued commitment to the purpose, goals, and learnings of the programs
Be clear, transparent, and communicative about the sunsetting process to address any concerns, anxiety, or uncertainty
Embed talent in roles across the organization to further the mission through priority work such as workplace experience, workplace technologies, human resources, talent management, and more
Transfer institutional knowledge into an appropriate knowledge management repository to preserve the learnings and guidance for future reference
Integrate the principles across the company’s overall strategy and operations to ensure metrics continue to be met around hiring, performance, promotion, and training best practices
Uphold the tenants of the COE in the company values and employee handbooks
Maintain tools and best practices developed by the COE to ensure that the learnings have ongoing, sustainable value
Continue to gather feedback from teams on what would drive consistency, innovation, and growth around areas that the COE previously owned
Sunsetting any COE can be a painful transition, but if we can embrace the learnings, acumen, and best practices in everything else we do, then we continue to make progress in our ability to innovate, connect, and grow as a business.
