In the grand corridors of modern enterprise, transformation has become the new currency of relevance. Among the latest fashions, the Centre of Excellence (CoE) model has emerged as a hallmark of progress, particularly in human resources. Designed to centralise expertise, streamline operations and drive strategic focus, these structures are celebrated as the backbone of organisational agility. Yet beneath the efficiency metrics and process dashboards lies a quieter story—one of displacement, lost purpose and the erosion of corporate soul.
A logical evolution
R Venkattesh, its former president, observed this tension closely at his previous stint. The shift to a CoE model was positioned as logical progress. Yet it brought unexpected complexity. “Transformation needs to walk on two legs,” he explains. “One leg is transactional—new structures, new processes, roles. The other is transformational—preserving knowledge, retaining culture, valuing people. Most organisations limp because they focus only on the first.”
“The creation of a CoE should not be a checkbox exercise. It must be born out of a larger transformational agenda. Too often, it becomes superficial restructuring—fancy on PowerPoint, hollow in practice.”
R Venkattesh, former president, DCB Bank
His experience with large-scale transformation gives him both insider clarity and outsider objectivity. “The creation of a CoE should not be a checkbox exercise,” he warns. “It must be born out of a larger transformational agenda.”
Culture bearers cast aside
The most telling consequence of this shift affects seasoned HR professionals whose roles are either hollowed out or eliminated entirely. These aren’t merely employees—they’re culture bearers who’ve shepherded organisations through highs and lows. When a CoE centralises functions such as recruitment or learning and development, local teams often lose their sense of ownership.
Consider the senior learning and development manager in a regional office who once curated learning journeys based on her teams’ unique needs. With the CoE in place, she was asked to “align with the central strategy,” her autonomy reduced to mere implementation. Within months, her engagement waned. Eventually, she left—taking years of contextual knowledge that no central dashboard could replicate.
Raj Narayan, a veteran HR leader, frames this impact starkly: “In the excitement of creating something new, we forget those who built what already existed. If the very people who nurtured your culture and led with intuition and compassion suddenly feel irrelevant, you haven’t just lost talent; you’ve lost trust.”
The central irony of the CoE model is that whilst it promises cohesion and consistency, it can breed fragmentation if implemented carelessly. When teams see their roles absorbed without adequate communication or consultation, morale suffers. Resistance sets in—not loudly, but subtly. “It’s like termites,” Narayan explains. “Quiet, invisible, but slowly weakening the very foundation you’re trying to strengthen.”
Finding balance
Despite these challenges, the CoE model offers undeniable benefits—especially in large, complex organisations. Shailesh Singh, CHRO, Max Life Insurance, offers a nuanced perspective: “Once you grow to multiple buildings and cities, the human touch you had whilst small begins to dilute. CoEs help bring efficiency, speed and scale. But the trick is not to centralise the soul. You centralise the task, not the touch.”
“Once you grow to multiple buildings and cities, the human touch you had whilst small begins to dilute. CoEs help bring efficiency, speed and scale. But the trick is not to centralise the soul. You centralise the task, not the touch.”
Shailesh Singh, CHRO, Max Life Insurance
At Max Life, the hiring process exemplifies this duality. The hiring CoE manages the backend—dealing with vendors, standardising offers, ensuring consistent policies. But once an offer is made, the HR business partner steps in. “They assign a buddy, explain the culture, stay available through the onboarding journey, because these emotional touchpoints cannot be managed by a centralised team. That’s where experience is built, and loyalty is earned,” Singh explains.
This hybrid approach—where CoEs handle standardisation and business partners handle personalisation—helps Max Life avoid the pitfalls of impersonal transformation. It also improves HR’s effectiveness without bloating its size. “Your span gets better,” Singh notes. “You can have fewer business partners, but more impact, because the CoE takes care of the repetitive backend. You get efficiency and empathy in equal measure.”
Centres of empathy
However, many organisations falter because they don’t build this bridge between efficiency and experience. They adopt the CoE model as a one-size-fits-all solution, neglecting their workforce’s emotional fabric. “The problem isn’t the CoE model,” emphasises Narayan. “The problem is treating people as functions. Ironically, HR forgets its own principle—that people are not processes.”
To avoid such missteps, Singh recommends embedding human-centred planning into structural shifts. This includes mapping out knowledge transfer proactively, creating alternate roles for critical employees, and leveraging digital tools to preserve institutional memory. But even more crucial is messaging from the very top. “Leadership must communicate with clarity and compassion. If people feel informed, respected and involved, even the toughest transitions become palatable,” Narayan believes.
One of the most overlooked consequences of CoE-driven restructuring is culture’s silent evolution. When tenured employees see peers displaced or their own relevance questioned, a ripple effect begins. Loyalty becomes a liability rather than an asset. Younger employees notice. The message they receive isn’t about transformation—it’s about disposability.
“There’s a difference between change and churn,” says Venkattesh. “If your best people are leaving not because of better opportunities, but because they feel undervalued—that’s churn. And churn erodes culture.”
The warning signs are often subtle: a sudden dip in productivity, a rise in passive disengagement, increased dependence on informal networks to “get things done” because formal structures no longer inspire trust. “You have to tune into the organisation’s frequency,” Singh observes. “Not just what the dashboards say, but what the corridors are whispering.”
Perhaps the most critical insight is that transformation is not just a technical act; it’s an emotional one. A CoE should be a structure that enables, not replaces. It should liberate people to focus on value, not make them question their worth. It should deliver excellence—but never at the cost of belonging.
In organisations where the CoE model succeeds, you’ll often find a common thread: intentionality. Not just in design, but in execution. They don’t just create centres of excellence—they create centres of empathy.
The real test of a Centre of Excellence is not whether it delivers efficiency, but whether it does so without creating collateral damage. As Venkattesh aptly puts it: “Transformation is like a river. It should carry everyone forward—not wash a few away. If we forget that, we may win the efficiency game but lose the engagement war.”
Because excellence, in its truest form, is not just about systems—it’s about stories. And no organisation can afford to forget the people who wrote theirs.