Building a Commercial Mindset - Governance

When establishing a Shared Services Organization (SSO) in early 2001, the American Cancer Society developed a governance structure based on a two-pronged approach: via a Customer Leadership Group (CLG) addressing strategic and ownership issues; and via a Relationship Management Group (RMG) addressing customer operational perspectives. As the SSO matured, however, the CLG's role no longer applied, and it has recently been replaced with a new governance group, the Shared Services Leadership Council, tasked with thinking as "owners" of a business would think, verses a customer’s viewpoint.

The American Cancer Society Shared Service Center (SSC) began serving its first customer in April 2001. More than 15 months before the SSC ever processed a transaction, a customer-based leadership group was put in place to oversee the strategy, design and operations of the Center. Membership in the group was open to all customers, regardless of their participation level at the SSC. In fact, for the first 18 months of operation, less than half of all members of the CLG were truly "customers" of the SSC. Today, all 14 divisions of the American Cancer Society, and the National Home Office, participate in the donation processing, accounts payable and purchasing services offered by the SSC. As the American Cancer Society’s SSO has matured, so has the governance model that is used.

The Original Governance Model

While developing the shared services initiative at the American Cancer Society (ACS), more than 130 staff members from all areas of expertise and levels within the organization participated in the planning, strategy and design of the SSC. The ACS studied shared services models of many other organizations before venturing off to create its own. One particular model caught the ACS’ attention due to the organization’s cultural similarity to the ACS. The model was built upon the concept that a customer must have representation within the shared service organization, and that the SSC must be intimately knowledgeable about the customer’s business. The ACS took this model and eventually created two groups to provide direction and oversight for the shared services organization.

As already explained, the initial group – the Customer Leadership Group – was developed during the formative stages of the SSC. This model allowed each customer to appoint a representative to serve on the new governing body. All of the representatives were senior managers within the customer’s organization and had the authority to make decisions on behalf of the customer. The stated purpose for the group was as follows: As a strategic and representative body, the Customer Leadership Group will ensure that the Shared Services Center will meet mutually agreed upon business requirements of the Divisions and the National Home Office.

The group met quarterly, with most meetings being face-to-face. The plan called for this group to be strategic in nature. As a start-up operation, much of the group’s time was spent overseeing and approving the design for the SSC during its first year of operation. During the second year of operation, the group began to move its focus to more strategic issues, but continued to spend a majority of its meeting time talking operations.

Early in the SSC’s second year of operation a second group was formed. It was envisioned that this new group would concentrate its efforts on operational issues associated with the SSC, and thereby free up the Customer Leadership Group to become more strategic in its focus. The Relationship Managers Group (RMG) was charged with improving existing services, fostering effective communication on operational issues between shared services and the customer, and designing new services that enable mission delivery for the American Cancer Society. Each customer was asked to appoint a representative to serve on this group, who would dedicate at least 50 percent of his/her time to shared services issues, and become the primary customer contact for the SSC.

Since opening its doors for operation, the SSC has already reengineered many of its services and created new lines of service. The Relationship Managers Group has played a key role in these efforts, and continues to provide direction on all procedure and process changes for the SSC. The responsibilities of the Relationship Managers Group (RMG) are the following:

Relationship Managers Group Responsibilities

• serves as the primary contact between shared services and the customer regarding all operational issues;
• responsible for the customerbased implementation of new policies and procedures including customer communication and training for shared services’ processes;
• participates in the development of new policies and procedures for shared services;
• provides input into process reengineering efforts and the development of new services;
• works to ensure new and existing services are user friendly, and that required procedures and controls are being followed at the customer level;
• provides shared services with customer demand forecasts, usage reports, and relevant statistical information.

Today’s Governance Model

Sometime late in the second year of operation it became clear to members of the Customer Leadership Group that its original purpose was no longer valid, due to SSC maturation. Many things had changed since the group was established. Most importantly, the SSC was running well and the need to discuss operational issues no longer existed, due to the RMG. By this point in time most senior managers, field staff and volunteers within the ACS were familiar and pleased with the work of the SSC. The SSC had become part of the fabric of the ACS and the need to protect it and justify its existence no longer existed. All Division customers had agreed to participate in the SSC and began talking about other services the SSC could provide.

The senior-most leadership group in the organization determined, in August 2003, that a new governance group should be formed for shared services. The new group would be smaller in size (with nine members to represent the 15 customers) and have only the most senior members of the organization as members. Due to the growing importance of shared services as a strategic initiative, the group would report to the National Executive Team within the ACS.

The new governance body would be called the Shared Services Leadership Council. Its purpose would be: to provide strategic oversight and direction to ensure shared services effectively and efficiently performs selected mission support functions for its customers, so those customers can focus on mission delivery for the American Cancer Society.

This new governance group is tasked with thinking as "owners" of a business would think verses having a customer viewpoint influence their decision-making. As you will note from a review of the Leadership Council’s responsibilities, the intent of this group is to be strategic and set objectives for the SSC that benefit the entire organization.

Shared Services Leadership Council Responsibilities

• review, analyze and set performance measurements for shared services against agreed upon industry (and/or other) standards;
• monitor current business services, and recommend and/or approve opportunities for expanded business services;
• review and approve all performance targets and operating standards for shared services, with an emphasis on balancing those metrics/standards with cost effectiveness for ACS customers.
• monitor and promote full participation of all ACS customers in shared services;
• maintain accountability for financial oversight of shared services to include development, review and approval of the annual budget;
• review and approve the Service Level Agreement and all related documents;
• provide ongoing strategic planning as required, including planning for necessary research and development funding;
• have formal involvement in the evaluation of the VP of shared services through feedback to the National COO.

Moving to an ownership mindset has changed nature of the governance model. Discussions are now focused upon strategy and outcomes, where in the past they tended to focus on process and procedures. Procedure and process is still discussed as part of shared services in the Relationship Managers Group. The RMG works closely with the SSC, and the Leadership Council relies upon it to provide recommendations and input on strategy and the creation of new services (see Figure 1).

The shared services model is still evolving within the ACS. As the SSC takes on new service areas it is likely that the governance models used within the ACS will change again.

For the time being, it seems that the organization is comfortable that the models in place today are working well. The primary reason this model works well for the ACS is that it reflects the culture of the organization and the developmental stage of the shared services organization within the ACS.

Other governance models may be more appropriate for different types of organizations. The key is to find a model that works within an organization’s culture and addresses the needs and concerns of the customer.