Corporate headquarters (CHQ) have traditionally shaped the identity of their company by promoting a common culture based on shared values. They communicate its raison d'être to the outside world and make the company what it is to the people that work there. At the same time, CHQ define and apply corporate governance principles, ensure the provision of sufficient financing, manage portfolios and synergies and, not least, fulfill the company's reporting duties, both statutory and voluntary. But performing these fundamental capabilities well is no longer enough to justify their existence: Corporate headquarters are increasingly called upon to add value to the company as a whole and to both see and establish themselves as a business partner to the operating entities.
Roland Berger conducts regular analyses and surveys on corporate headquarters. Back in 1999, we started out by investigating the size and efficiency of CHQ. As of 2008, we increasingly looked at the role of corporate headquarters. In 2012 and 2014, the focal point was on identifying the specific capabilities that make corporate headquarters successful. As such, our CHQ study goes beyond conventional benchmarking, focusing on the key issues for the future and the levers that modern corporate headquarters can apply in order to add value.
Value levers and competitive edge
Today's corporate headquarters find themselves under immense pressure to enhance efficiency – they need to achieve more with less. Average CHQ costs range between 2% and almost 7% of company revenues, depending on what management concept they pursue and which industry cluster they belong to. Consequently, they need to demonstrate to their various stakeholders that they provide a parenting advantage, in other words that the business units or subsidiaries are substantially better off with their parent company than they would be without it. In our studies we have identified six value adding capabilities. Corporate headquarters need to be able to:
- Provide strategic direction
- Manage complexity
- Enable global collaboration
- Strengthen innovation
- Ensure execution
- Provide talent
These six value adding capabilities are what make the difference between good corporate headquarters and very good ones. They enable companies to generate a competitive edge with their corporate functions and shared services.
Roland Berger offers individual benchmarking to help make interested companies more efficient and agile. Encompassing much more than just the findings of our international surveys, our benchmark database also incorporates our experience from more than 400 client projects. The resulting CHQ Action Map shows companies what they can do in practice to focus on the six value adding capabilities of corporate headquarters. And helps them achieve a highly efficient yet elastic organizational structure in which centralized and decentralized functions complement each other perfectly.
Sound interesting? Please get in touch with our team of experts, who will be happy to help.
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CORPORATE HEADQUARTERS STUDY 2016/17
To participate in our corporate headquarters study 2016/17 please write us an
What you'll receive: An exclusive version of the detailed study results, a benchmarking assessment of your company's headquarters and a workshop with Roland Berger Experts regarding qualitative implications and quantitative results for your company.
Listen to an interview with Fabian Huhle about Corporate Headquarters on management radio.