Central banks' mandates have expanded over the past few decades. Increasing public scrutiny and a changing operating environment have brought a pressing need for central banks to become high performance organizations. But what kind of structural changes and transformation is necessary and desirable?

Focusing on our findings, we have identified two main areas where transformation efforts should be concentrated:

• Improvement of core capabilities
• Enhancement of operational efficiency

First thing to do: focus on the core business. A functional analysis performed by Roland Berger on central banks in the Eurosystem reveals support functions typically represent 45 percent of the workforce in central banks, while best practice central banks operate with only one third support staff. In our THINK ACT publication we suggest considering five key principles that help improve the efficiency of support functions and transform them into a strategic cost or quality advantage.

Second lever: the organizational structures of central banks, which are made up of a large number of historically grown hierarchical levels, having never been touched by reorganization efforts. By taking a fresh approach, i.e. creating transparency and accountability, central banks have the potential to reinvent themselves. The result: Faster decision making, improved flow of information, and the reduction of staff costs. Examples show the enormous potential of our strategy.

In order to successfully transform a central bank, robust top management ownership is required, coupled with strategic program management and continuous effort to drive cultural change among employees, management and key stakeholders.