Engaging_for_Results_-_BGCs_Approach_to_...

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Collaboration Prepared for ARACY workshop April 2004

CULTURE OF COLLABORATION : 

CULTURE OF COLLABORATION ‘This is the labour of partnership, of folks who have pulled together and enjoyed what they’ve done and have become partners in what we’ve accomplished.... we’ve had a lot of great leaders in this company, and the greatest thing is we’ve got ideas from all 380,000 associates. That’s the best part – all of us working together. I hope we can keep it going’ – Sam Walton, President, Walmart ‘Our success depends on each of us. We work together in a way that recognizes and takes advantage of this... we supplement individual accountability by creating a team environment in which we collaborate to maximize overall performance’ – Warren Larsen, Former CEO, NZDB ‘The single most important thing is to remember that knowledge transfer and how-how transfer are simply part of performance. So when managing and directing the firm’s performance, you have to say explicitly that this is part of the strategy and that it’s very important’ – Sir John Browne, CEO, BP

ORGANIZATIONS NEED BOTH PLATFORMS FOR COLLABORATION AND A SUPPORTIVE ENVIRONMENT : 

ORGANIZATIONS NEED BOTH PLATFORMS FOR COLLABORATION AND A SUPPORTIVE ENVIRONMENT High Low Look After # 1 Focus on individual, not company Not Established Established Supportive Environment Platforms For Collaboration Power Games Individualistic teams and processes Culture Of Collaboration Collaboration creating value Untapped Team Spirit Not extracting full value from sharing

COLLABORATION SHOULD BE VALUE CREATING WITH MECHANISMS SUPPORTED BY AN OPEN ENVIRONMENT : 

COLLABORATION SHOULD BE VALUE CREATING WITH MECHANISMS SUPPORTED BY AN OPEN ENVIRONMENT ‘It is this learning, sharing and action-driven culture, when laid across the diverse business of GE, that gives us our true advantage, an advantage single-industry companies can never match – what we call ‘horizontal learning’ across more than 250 diverse, global GE business segments’ – Jack Welch, CEO, General Electric Value Of Collaboration recognized Environment Of Openness, Trust And Mutual Respect Mechanisms For Sharing In Place Note: See Appendix for further quotes on collaboration ‘To me, the most important element in establishing a happy, prosperous atmosphere is the insistence upon open, free, and honest communication up and down the ranks of our management structure and with our associates’ – Sam Walton, President, Walmart ‘You can’t expect others to share their knowledge and resources with you fully unless you have a strong relationship with them’ – John Browne, CEO, BP ‘Our challenge has been getting people to systematically capture information the company needs in order to be able to use both explicit and implicit knowledge repeatedly. In the case of explicit knowledge, that means recording the actual data. In the case of implicit knowledge, it means keeping a record of the people who have the know-how to solve a problem so that others can find them when the need arises’ – John Browne, CEO, BP

KNOWLEDGE DATABASE – XEROX KM FOR CUSTOMER SERVICE REPRESENTATIVES : 

KNOWLEDGE DATABASE – XEROX KM FOR CUSTOMER SERVICE REPRESENTATIVES Xerox Have Implemented A Comprehensive KM Database... Value of collaboration recognized Desire to capture the tacit local knowledge held by Xerox customer service representatives (technicians) for wider circulation Environment of openness, trust and mutual respect Research in Xerox revealed that customer service representatives shared knowledge within their local group in three ways: Storytelling: systematic recounting of the problem and steps towards a solution Improvisation: experimentation and improvisation, particularly when working in pairs Informal communities of practice: discussions over meals, asking questions, sharing ideas and solutions Mechanisms for sharing in place Eureka project Formation of a knowledge management database containing tips on repairing different problems with Xerox machines Tips undergo a comprehensive peer review local level centralized review process organized by BUs ensures that tips are relevant, reliable and not redundant Reps chose to have their names on the tips rather than be paid to ensure high quality (not quantity) and earn peer status Usefulness of tips tracked to ensure right information is included ‘We now see knowledge sharing as a business discipline as important to the future as the quality movement turned out to be in the early 1980s – Web site ... recognized As Financially And Externally Successful Project Eureka’s outstanding success Currently 30,000 records 25,000 active users 250,000 problems solved per annum Saves US$11m per annum, ie 5% of field service (parts and labour) costs eg Brazilian engineer about to replace a problematic US$40k machine found a tip from a Montreal technician to replace a 50 cent fuse Worldwide recognition of employees who have contributed eg spontaneous standing ovation at a conference for a technician whose tips were greatly respected by co-workers Lead to development of ‘Docushare’, an external product based on Eureka experience and technology External recognition and awards for KM/Eureka Knowledge Company Of The Year - KM World Magazine (1999) Benchmark Company For Implementing KM - American Benchmarking and Quality Center (1999) Xerox Corporate Engineering Centre Selected As Benchmark Organization For Building And Sustaining Communities Of Practice – American Productivity and Quality Center (2000) Best Knowledge Project (Eureka) – Information Management Awards (1999) Top Ten Most Admired Knowledge Enterprises Award – (1998, 1999, 2000) Best Overall Knowledge Program – Most Admired Knowledge Enterprises Award (1999) Source: ‘Balancing Act: How to Capture Knowledge Without Killing It’, HBR, May/June 2000, p73; Web site Case Study

INFORMAL AND FORMAL NETWORKS – BP’s ‘PEER GROUPS’ : 

INFORMAL AND FORMAL NETWORKS – BP’s ‘PEER GROUPS’ Informal Networks Formalized Around Value Creation... Value of collaboration recognized organizational recognition of collaborative value through evolving concept of peer groups, eg 1992: ‘peer groups’ where leaders of approximately 12 similar BUs met to discuss strategic and technical challenges, without participation of senior management, ie knowledge sharing 1994: peer groups became results orientated and responsible for allocating capital amongst BUs and setting BU performance targets, with collective accountability for group performance Environment of openness, trust and mutual respect Collaboration focused around an open market of ideas Once had around 1700 networks and informal subnetworks People very willing to call on others Mechanisms for sharing in place System of collaboration and networks spread across whole organization, not just at top level In addition to peer groups, ‘cross-unit networks’ focusing on shared interests in networks and subnetworks ‘Learning communities’: each BU is within a functional ‘peer group’, whose membership changes as BUs enter different stage of lifecycle ‘Peer assist’: specific requests of expertise from another BU for a specified problem/project ‘Human portals’: people within the company-wide knowledge Web who are approached for advice on who to contact Electronic yellow-pages of experts and individual’s voluntary home pages outlining interests and expertise, technical data, real time lessons ‘Virtual teams’: PC network backed by video conferencing, electronic blackboards, scanners, faxes, groupware to facilitate interaction ...Generating Visible Financial Results Direct financial savings In first year of virtual team network US$30m in value generated through, eg reduced person hours to solve problems decrease in number of helicopter trips to rigs avoidance of refinery shutdowns US$400m in estimated savings in 1999 due to improved teamwork with external partners From 1987 to 1997, group performance improvements Raised performance from unfocussed mediocre performer to most profitable major oil company Debt slashed from US$16bn to US$7bn Among lowest industry R&D costs Output growing at 5% per year Employees reduced from 129,000 to 53,000 Shareholder Returns Relative To The Market: 1988-2000 Source: ‘Unleashing the Power of Learning: An Interview with British Petroleum’s John Browne’ HBR, Sept/Oct 1997, p146; ‘Introducing T-Shaped Managers: Knowledge Management's Next Generation’, Hansen and von Oetinger, HBR, March 2001, p107; Web site Case Study % Change TSR

PERMANENT TEAMS – FORD’S ‘GLOBAL STUDIO’ : 

PERMANENT TEAMS – FORD’S ‘GLOBAL STUDIO’ ‘Global Studio’ New Product Design Teams... Value of collaboration recognized ‘World Car’ global design strategy and manufacturing approach Required a new process for product development Realized that connectivity was the key to ensuring effective team work (both internal and with external partners) Environment of openness, trust and mutual respect Believe in building a team of people ‘who have agreed to join hands and are committed to putting their maximum effort into working together and trusting one another.’ (Alex Trotman) Then team agrees that they will make mistakes In 1996, ‘Ford 2000’ initiative aiming to have the intimacy, agility and spirit of a small company Mechanisms for sharing in place ‘Virtual Work Team’ using technology and tools Rather than creating co-located national product teams or convening ‘elaborate’ design summits ‘Global studio’ is a set of connectivity and team support tools that enables Design engineers from different geographical locations to work concurrently on product design Live, multiple-site interaction using audio, video, text, images, and 3D models Intranet for communication and sharing knowledge within and among teams: original documents, analyses, discussions Concurrent modification to product design ...Have Seen Real Design Improvements Process and product improvements Shortened vehicle design cycle time from 37 months to 24 months Cut engineering costs by 25-30% Reduced number of prototypes by 25% Reduced plant-to-dealer time for Mustang from 50 days to 15 days Improved overall product quality Fewer SKUs in inventory Simpler manufacturing processes Market Share Has Improved Since 1990 Market Share (%) Case Study Source: Literature search; Web site; ‘Lessons from the Top’

THE ‘BOUNDARYLESS’ GENERAL ELECTRIC : 

THE ‘BOUNDARYLESS’ GENERAL ELECTRIC GE Has Instigated A Boundaryless Culture... Value of collaboration recognized Businesses share technology, design, personnel, compensation and evaluation systems, manufacturing processes, and country and customers knowledge Since 1981, employees with stock options have grown from 200 to 27,000 Environment of openness, trust and mutual respect One of GE’s values is to act in a ‘boundaryless’ fashion an ‘open, anti-parochial environment, friendly toward seeking and sharing of new ideas, regardless of their origins’ Mechanisms for sharing in place Corporate Executive Council formed in 1996 with top 35 executives Meet quarterly with sole purpose of spreading ideas across organization Functional Council where top 150 executives meet quarterly ‘Global Leaning Culture’ of extensive global training, including the Management Development Institute Transfer human and intellectual capital across business units ‘Work-out’ program at Crotonville Involving 700 sessions for 700,000 employees to date All leaders placed in front of 100 employees 8-10 times per year in three day town meeting sessions (cost of US$450k per annum) Leaders leave after initial brief, group addresses business issues/problems and make proposals to leaders at end of three days ...Leading To Superior Global Results From Sharing And Learning Operating margins: 16.7% in 1998 versus under 10% for last 100 years Inventory turns: 9.2 in 1998 versus 3-4 range for last 100 years Examples of co-operation Gas turbines share manufacturing technology with Aircraft engines Lighting and medical systems collaborate to improve x-ray tube processes ‘Work-out has made us faster and more open to ideas from anywhere, and as a result cracked the back of bureaucracy, got everyone involved and made us a much better company’ – JackWelch, CEO, GE, June 1999 GE 10 Year TSR Is 37.5%: December 2000 Total Return Index, 1990 = 100 (December) Total Return Index Case Study GE S&P 500 Source: Literature search; Web site

COLLABORATION VIGNETTES (I) : 

COLLABORATION VIGNETTES (I) Case Studies ‘Information Guides’ 10 people within company Point of contact for anyone seeking computer based information Reduces time taken to find right information and compare across BUs ‘Information Matchmakers’ Cross-pollinate ideas eg, Singaporean director brought together the Philippines’ and India’s managing directors, sparking new product development for the Philippines Extensive KM ‘Cisco Employee Connection’ is an extensive intranet for all employees to share the same information simultaneously through the network ‘Cisco Connection Online’ provides online knowledge for employees, partners, shareholders, prospects Navigation To An Expert Nokia Learning Centres Deliver training activities that transfer know-how throughout the company Incentives for collaboration Project incentive plans Team incentive plans Stock option plans Knowledge sharing Most extensive corporate Website and intranet Considers the knowledge base to be the most valuable asset Microsoft Campus Development Laboratory and Developer Community Centre to provide resources for developers Culture of internal collaboration/ cooperation between disciplines Chrysler Tech Center For new product development ‘Platform’ for each type of car (large, medium, compact, minivan) Includes many functions: design, engineering, manufacturing, marketing, finance Networks

COLLABORATION VIGNETTES (II) : 

COLLABORATION VIGNETTES (II) Case Studies High operational consistency from coordinated practice sharing Product team develops new product Sells product through org matrix Involves larger development and launch team including division manager category manager advertising marketing Acquired Topeka, a Gaines dogfood factory in Kansas Organized in autonomous work teams All four owners over 20 years tried to disband teams Eventually Heinz accepted power of teams and used it for a model in other plants Joint teams for market entry, with ‘Corporate entrepreneurs’: business specialists from around the world, and Local experts Rotate managers across international markets Communication between centre and local teams Horizontal and vertical networks Captures and embeds learnings Egalitarian culture Teamwork and ownership in all plants Collaboration cascades through organization ‘Share the pain’ cuts manager/executive pay during downturn For managing directors of each operating unit: Cross-directorships on another unit’s board encouraging best practice Weekly two hour phone meetings to discuss what ‘keeps them awake at night’ Permanent Teams Project Teams In 1997 launched training program for high potential managers Small teams work for a year on a problem facing a BU Outcome 100 teams to date saving US$100m through ideas

COMPLETE QUOTES ON COLLABORATION (I) : 

COMPLETE QUOTES ON COLLABORATION (I) ‘You can’t expect others to share their knowledge and resources with you fully unless you have a strong relationship with them’ – John Browne, CEO, BP ‘People are much more open with their peers: they are much more willing to share and to listen, and are much less likely to take umbrage when someone disagrees with them. Regardless of the team, if it isn’t operating on a peer basis, it’s not going to get the right interactions’ – John Browne, CEO, BP Knowledge transfer and know-how transfer are simply part of performance’ – John Browne, CEO, BP ‘The most important aspect of any relationship is understanding what your partners hope to get out of it and to work hard to help then achieve that goal. It is the key to transforming a contractual relationship into a genuine collaboration’ – John Browne, CEO, BP ‘The way management treats the associates is exactly how they associates will then treat the customers’ – Sam Walton, President, Walmart ‘It is this learning, sharing and action-driven culture, when laid across the diverse business of GE, that gives us our true advantage, an advantage single-industry companies can never match – what we call ‘horizontal learning’ across more than 250 diverse, global GE business segments’ – Jack Welch, CEO, General Electric ‘To me, the most important element in establishing a happy, prosperous atmosphere is the insistence upon open, free, and honest communication up and down the ranks of our management structure and with our associates’ – Sam Walton, President, Walmart Appendix

COMPLETE QUOTES ON COLLABORATION (II) : 

COMPLETE QUOTES ON COLLABORATION (II) ‘Our challenge has been getting people to systematically capture information the company needs in order to be able to use both explicit and implicit knowledge repeatedly. In the case of explicit knowledge, that means recording the actual data. In the case of implicit knowledge, it means keeping a record of the people who have the know-how to solve a problem so that others can find them when the need arises’ – John Browne, CEO, BP ‘This is the labour of partnership, of folks who have pulled together and enjoyed what they’ve done and have become partners in what we’ve accomplished... we’ve had a lot of great leaders in this company, and the greatest thing is we’ve got ideas from all 380,000 associates. That’s the best part – all of us working together. I hope we can keep it going’ – Sam Walton, President, Walmart ‘Our success depends on each of us. We work together in a way that recognizes and takes advantage of this... we supplement individual accountability by creating a team environment in which we collaborate to maximize overall performance’ - Warren Larsen, Former CEO, NZDB ‘You can’t expect others to share their knowledge and resources with you fully unless you have a strong relationship with them’ – John Browne, CEO, BP ‘People are much more open with their peers: they are much more willing to share and to listen, and are much less likely to take umbrage when someone disagrees with them. Regardless of the team, if it isn’t operating on a peer basis, it’s not going to get the right interactions’ – John Browne, CEO, BP ‘Knowledge transfer and know-how transfer are simply part of performance’ – John Browne, CEO, BP ‘The most important aspect of any relationship is understanding what your partners hope to get out of it and to work hard to help then achieve that goal. It is the key to transforming a contractual relationship into a genuine collaboration’ – John Browne, CEO, BP Appendix

COMPLETE QUOTES ON COLLABORATION (III) : 

COMPLETE QUOTES ON COLLABORATION (III) ‘It is this learning, sharing and action-driven culture, when laid across the diverse business of GE, that gives us our true advantage, an advantage single-industry companies can never match – what we call ‘horizontal learning’ across more than 250 diverse, global GE business segments’ – Jack Welch, CEO, General Electric ‘To me, the most important element in establishing a happy, prosperous atmosphere is the insistence upon open, free, and honest communication up and down the ranks of our management structure and with our associates’ – Sam Walton, President, Walmart ‘We now see knowledge sharing as a business discipline as important to the future as the quality movement turned out to be in the early 1980s’ – Xerox Website Appendix

CULTURE OF COLLABORATION : KEY ELEMENTS : 

CULTURE OF COLLABORATION : KEY ELEMENTS ‘It is this learning, sharing and action-driven culture, when laid across the diverse business of GE, that gives us our true advantage, an advantage single-industry companies can never match – what we call ‘horizontal learning’ across more than 250 diverse, global GE business segments’ – Jack Welch, CEO, General Electric Value Of Collaboration recognized Environment Of Openness, Trust And Mutual Respect Mechanisms For Sharing In Place Note: See Appendix for further quotes on collaboration ‘To me, the most important element in establishing a happy, prosperous atmosphere is the insistence upon open, free, and honest communication up and down the ranks of our management structure and with our associates’ – Sam Walton, President, Walmart ‘You can’t expect others to share their knowledge and resources with you fully unless you have a strong relationship with them’ – John Browne, CEO, BP ‘Our challenge has been getting people to systematically capture information the company needs in order to be able to use both explicit and implicit knowledge repeatedly. In the case of explicit knowledge, that means recording the actual data. In the case of implicit knowledge, it means keeping a record of the people who have the know-how to solve a problem so that others can find them when the need arises’ – John Browne, CEO, BP

THERE ARE FIVE MAIN TYPES OF COLLABORATION : 

Type Of Collaboration Knowledge database Navigation to an expert Network Permanent team(1) Project team(1) Definition Knowledge management system Systematized records where useful to the organization Usually accessed through an intranet/B2E portal Ability to find an expert within the company Using technology Through people (official or unofficial) Unofficial group loosely bound with no collective accountabilities, eg Communities of practice Learning communities Team formed formally for long-term purpose with collective accountabilities, eg Executive, Functional or Regional Councils Global key account management teams Cross-Directorships Peer groups New product development Often facilitated through technology Team formed formally for specific short-term purpose with collective accountabilities, eg Merger integration team Market entry team Often facilitated through technology Case Study Examples Xerox, Microsoft Siemens, Cisco Hallmark, GlaxoSmithKline BP, Carrefour GE’s WorkOut, BP, Microsoft Nokia GE, BP Nike Ispat BP Chrysler, Microsoft, Nike BP Carrefour, Nike, Chrysler THERE ARE FIVE MAIN TYPES OF COLLABORATION (1) See Appendix for examples of two types of teams

THE APPROPRIATE FORM OF COLLABORATION IS CHOSEN THROUGH APPLYING TWO COLLABORATION MATRICES : 

THE APPROPRIATE FORM OF COLLABORATION IS CHOSEN THROUGH APPLYING TWO COLLABORATION MATRICES Format Of Knowledge Format/Impact Collaboration Matrix trade-off Mutual Benefit Navigation To An Expert Network Not Codifiable Codifiable Impact On Individual/Division Knowledge Database Permanent Team Project Team Frequency/Impact Collaboration Matrix trade-off Mutual Benefit Navigation To An Expert One-off Regular Impact On Individual/Division Frequency Of Collaboration Knowledge Database Network Permanent Team Project Team

FRAMEWORK FOR ACHIEVING A COLLABORATIVE ENVIRONMENT : 

FRAMEWORK FOR ACHIEVING A COLLABORATIVE ENVIRONMENT 1. Determine where collaboration creates overall value 2. Determine the most appropriate form of collaboration 3. Implement/review chosen form of collaboration 4. Measure the effectiveness of collaboration 5. Reward successful collaboration and make changes Identify areas where there is value in collaboration Determine overall value through a cost/benefit analysis Ensure value is explicit and transparent Determine the most appropriate form of collaboration Consider the Frequency of collaboration Impact on individual/division Degree to which the information can be codified Articulate the process of operation for each existing and new form of collaboration Determine whether value has been captured Measure through Joint outcomes Peer review of contribution Development of organizational capabilities Link with metrics and targets in the performance management system Link successful collaboration with incentives/ performance management framework Make visible recognition for success Review collaborative efforts, ensuring focus on creating value Change collaborative structure, if necessary Toolkit Encourage A Collaborative Organizational Culture

1. DETERMINE WHERE COLLABORATION CREATES OVERALL VALUE (I) : 

1. DETERMINE WHERE COLLABORATION CREATES OVERALL VALUE (I) Toolkit Identify And Quantify Situations Where Value Can Be Created Same functions conducted across different locations/ environments Effective allocation and utilisation of scarce resources Effective execution of business processes Eg, human resources, finance Similar processes in different locations Effective and timely transfer of knowledge/best practices Eg, mining, manufacturing Interdependency Potential synergies captured Smooth and quick implementation of strategies Eg, resource trade-offs Seamless face to customers Eg, key account teams Growth opportunities only available through collaboration Eg, new product development, market entry of existing products Constructive management of trade-offs that impact across organizational boundaries Eg, post merger integration Quantify The Cost Of Collaboration Effort and energy required to reach collaborative state Technology and resources required for collaboration Lost revenue from reducing individual’s other responsibilities/accountabilities Likelihood/difficulty of success A collaboration must Create value beyond that of individual or current performance cells Not compromise individual accountability

1. DETERMINE WHERE COLLABORATION CREATES OVERALL VALUE (II) : 

1. DETERMINE WHERE COLLABORATION CREATES OVERALL VALUE (II) Toolkit (Potential) Value ‘Price To Pay’ Low High Relatively Low Value Refrain from new collaborations Minimise/cut existing Low High Moderate/High Value Consider strategic implications Review current collaborations High Overall Value Create new mechanisms Stabilize current collaborations Low/Moderate Value Consider high level interaction Scope for future opportunities Start collaborating first where the value is highest

2. DETERMINE THE MOST APPROPRIATE FORM OF COLLABORATION : 

2. DETERMINE THE MOST APPROPRIATE FORM OF COLLABORATION Toolkit Format Of Knowledge Format/Impact Collaboration Matrix trade-off Mutual Benefit Navigation To An Expert Network Not Codifiable Codifiable Impact On Individual/Division Knowledge Database Permanent Team Project Team Frequency/Impact Collaboration Matrix trade-off Mutual Benefit Navigation To An Expert One-off Regular Impact On Individual/Division Frequency Of Collaboration Knowledge Database Network Permanent Team Project Team Apply Two Collaboration Matrices To Determine The Most Appropriate Form Of Collaboration

IMPLEMENT/REVIEW CHOSEN FORM OF COLLABORATION (I) : 

IMPLEMENT/REVIEW CHOSEN FORM OF COLLABORATION (I) Toolkit Navigation To An Expert Knowledge Database Must have a business purpose Contains organization’s most pressing issues Design system around information which is useful and used, not nice to have Extract key learnings from organization Plan carefully Resource rollout adequately Ensure that someone has overall responsibility for KM Customize to needs of individual users See: Harvard Management Update, August 2000 Intranet/B2E For the user Sections for different uses personal peer public Not complex Single point of reference Increased timeliness of information Equality of access For development Need portal champion and senior management buy-in Systems to capture all required information See: KM on B2E, Intranet Knowledge Database Human Portals Can be informal or official Informal People who have been with the organization for a long time and across many divisions Peers select them for assistance Official Appoint people to facilitate contacts throughout the organization Acknowledge their role in their position description and accountabilities Allow time in their other roles to facilitate information exchange/contacts

IMPLEMENT / REVIEW CHOSEN FORM OF COLLABORATION (II) : 

IMPLEMENT / REVIEW CHOSEN FORM OF COLLABORATION (II) Toolkit Network Networks Allow networks to grow as employees find useful No official accountability for results However require all networks to be results orientated Not just meeting for mere knowledge sharing Support and leverage networks as appropriate to sustain them Identify/map them Provide means of communication (intranet, meetings) Allocate semi-official roles in organization See: KM for ‘organizational Learning: IRL Project’ Virtual Work Teams Communication Information exchange Live collaboration (eg, online conferences, whiteboards) Documents Document management Viewing tools Project management Basic scheduling Project planning and control Workflow assistance tools See: KM Deck ‘Online Collaboration and Project Management Solutions’

IMPLEMENT/REVIEW CHOSEN FORM OF COLLABORATION (III) : 

IMPLEMENT/REVIEW CHOSEN FORM OF COLLABORATION (III) Toolkit Formal Teams (Project And Permanent) A. Develop Team Charter B. Agree Appropriate Membership/ Roles C. Launch Team And Develop Protocols D. Develop Necessary Processes E. Determine Collective Account-abilities F. Develop Performance Measures And Incentives Value of charter Helps people to focus Sets direction Design charter around value- adding activities Explicitly exclude other activities Eg, focus on capturing cost and cross-selling activities Eg, intensive use of best practice Determine who needs to be a member of the team to meet charter Identify a specific role for each member Within team Between team and the rest of organization Outline the key processes required to meet charter Identify linkages with other teams Agree frequency and forums for team interaction Set primary agenda and timetable for meetings Determine reporting relationships Determine collective accountabilities Where trade-offs, use creative tension Clear minimum deliverables Contribution to overall purpose Autonomy within boundaries Agree on collective responsibility for achievement Articulate in position descriptions Develop measures necessary to evaluate performance of team Collective accountabilities Team effectiveness Individual contributions Obtain commitment to measures Develop incentives and rewards which satisfy performance management system Financial Non-financial Source: Developed from KM Deck ‘organizational Design – Soup to Nuts’. See Appendix for documented examples of each step Evaluate likely success of project using DICE Make changes if required Evaluate current projects with Peer review DISC/Myer Briggs Determine how the team members will work together eg Decision making Conflict resolution Communication Protocols

MEASURE THE EFFECTIVENESS OF THE COLLABORATION (I) : 

Toolkit Sample Peer Review Collaboration Questions Each individual in the team was evaluated on a scale of 1 (strongly disagree) to 5 (strongly agree) on the following questions 1. Is respected as a valuable contributor to this team 2. Makes a valuable contribution to discussion and debate on key issues 3. Openly shares knowledge and experiences with others 4. Listens carefully and non-defensively to various points of view whether or not he/she agrees 5. When conflicts arise is reasonable minded in seeking solutions that will benefit the organization overall 6. Follows through on commitments made 7. Maintains group solidarity at all times 8. Acts with integrity, keeps confidences and does not misuse sensitive information 9. Demonstrates a preparedness to put the organization’s collective interest in front of personal and divisional interest 10. Fosters collaboration and teamwork between his/her area and the rest of the organization Peer Review Can Assess Behavioural Alignment With Organizational Goals (1) Median score form BCG database on this question Example Peer Review (I): Questionnaire Individual Peer Feedback Results (Personal Averages By Question) Fosters collaboration and teamwork between his/her area and the rest of the organization Demonstrates a preparedness to put company’s collective interest in front of personal/divisional interests Two team members not aligned with desired behaviours Client Example MEASURE THE EFFECTIVENESS OF THE COLLABORATION (I)

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Puts Company Interests First Fosters Collaboration And Teamwork 4. MEASURE THE EFFECTIVENESS OF THE COLLABORATION (II) Toolkit Example: Peer Review (II): A Peer Review Process Helps To Drive Behaviour Change Client Example 1998 1997 • • • • • • • • 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 G H F A B E C D Improved Deteriorated 1997 • • • • • • • • 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 G H F A B E C D 1998 Improved Deteriorated Scattergrams Of Overall Averages By Person: 1997 Versus 1998

ENCOURAGE A COLLABORATIVE ORGANIZATIONAL CULTURE : 

ENCOURAGE A COLLABORATIVE ORGANIZATIONAL CULTURE Organization Articulates collaboration as an organizational value Expects and invests in trust, openness, honesty and mutual respect Considers sharing to be a desirable norm Senior management Role includes collaboration Puts company performance before own business unit interests Relates and behaves as employees are expected to eg information does not determine individual power Communicates collaborative goals to employees Hires people who are willing to work in a team Promotes according to individual performance and track record as a collaborative team player Responds if people do not behave collaboratively when it is expected Manages trade-offs in resources Toolkit Encourage Qualities Which Will Develop A Collaborative Culture

TEAMS CAN BE ACROSS BUSINESSES OR FUNCTIONS : 

Cross functional and/or cross geographic in nature Have some form of collective accountability for a particular aspect of organization’s business performance For example SBU Management Teams Global Category Teams Global Business Solutions Team Global Supply Chain Team Cross geographic/single function Strong emphasis on building functional expertise and defining global standards Sub-group of members, the ‘Network Leadership Group’, ensures the Network functions effectively For example Global R&D Global HR Global Finance Global IS Global Manufacturing Global Sales TEAMS CAN BE ACROSS BUSINESSES OR FUNCTIONS Examples Of Two Types Of Teams Appendix Business Teams Functional Networks/Teams

EACH STEP OF FORMING A TEAM NEEDS TO BE DOCUMENTED : 

Incentives EACH STEP OF FORMING A TEAM NEEDS TO BE DOCUMENTED Formal Teams (Project And Permanent) A. Develop Team Charter B. Agree Appropriate Membership/ Roles C. Launch Team And Develop Protocols D. Develop Necessary Processes E. Determine Collective Account-abilities F. Develop Performance Measures And Incentives Value of charter Helps people to focus Sets direction Design charter around value adding activities Explicitly exclude other activities Eg, focus on capturing cost and cross-selling activities Eg, intensive use of best practice Determine who needs to be a member of the team to meet charter Identify a specific role for each member Within team Between team and the rest of organization Outline the key processes required to meet charter Identify linkages with other teams Agree frequency and forums for team interaction Set primary agenda and timetable for meetings Determine reporting relationships Determine collective accountabilities Where trade-offs use creative tension Clear minimum deliverables Contribution to overall purpose Autonomy within boundaries Agree on collective responsibility for achievement Articulate in position descriptions Develop measures necessary to evaluate performance of team Collective accountabilities Team effectiveness Individual contributions Obtain commitment to measures Develop incentives and rewards which satisfy performance management system Financial Non-financial Membership And Roles Member Role Rewards Source: Developed from KM Deck ‘Organizational Design – Soup to Nuts’ Evaluate likely success of project using DICE Make changes if required Evaluate current projects with Peer review DISC/Myer Briggs Determine how the team members will work together eg Decision making Conflict resolution Communication Protocols Appendix

A. DEVELOP TEAM CHARTER (I) : 

Design Charter Of Global Leadership Team Characteristics Charter Of SBU Management Team Redefinition of Executive Team role reflected in new name Corporate Executive Team Global Leadership Team Two levels of orchestration Global - trade-offs between SBUs and functions SBUs - trade-offs between categories Team charters cascaded down into senior executive role and responsibility redefinition Leadership Training Program reconfiguired to reflect required changes and provide support to senior executives Setting objectives of SBU Monitoring and challenging SBU performance Allocating financial resources within SBU Developing and allocating key human resources within SBU Identifying and capturing opportunities across SBU Jointly contributing to decisions which impact across group Communicating matters of importance to the group Team Purpose Jointly develop strategy and objectives for the SBU and collaborate to ensure strategy can be executed effectively through sharing of knowledge, skills and experience across the SBU Objectives Example Charter (I): SBU Management Team Client Example Appendix A. DEVELOP TEAM CHARTER (I)

A. DEVELOP TEAM CHARTER (II) : 

A. DEVELOP TEAM CHARTER (II) Developing Global Supply Chain Strategy Integrated With Marketing Strategy Assess the strategic value of each supply chain step, including procurement, processing, stock management, transport and customer service Explicitly consider integrate versus outsource decisions Tailor the overall strategy to each business segment (SBU x categories x regions) Provide proactive input into sales and marketing strategies Developing And Rolling-Out Consistent Business Processes, Tools Demand forecasting Order-to-delivery Distribution planning Setting Global Performance Standards Define KPIs and targets for each step of supply chain Develop common definitions, tracking methods Develop guidelines for customization to markets Monitoring And Challenging Global Performance Define performance reporting processes Develop feedback mechanisms to market Identify issues and options, and follow-up to ensure implementation Identifying And Capturing Global Opportunities To Improve Overall Supply Chain Performance Identify opportunities/initiatives based on KPIs, market inputs, etc Develop process, mechanisms to capture opportunities Assign responsibilities, monitor progress and ensure implementation Acting As A Global Information Conduit Collect and disseminate cost, performance information Identifying And Transferring Best Practices Identify internal benchmarks through KPI monitoring Develop external benchmarks Ensure chain-wide transfer through consistent feedback processes Team Purpose Jointly develop the supply chain strategy and collaborate to ensure strategy can be executed effectively through sharing of knowledge, skills and experience across the line network Objectives Example Charter (II): Global Supply Chain Team Client Example Appendix

AGREE APPROPRIATE MEMBERSHIP AND ROLES : 

Example Membership And Roles: Global Supply Chain Team AGREE APPROPRIATE MEMBERSHIP AND ROLES Client Example Appendix GGM, Operations Global Supply Chain Manager Reg. Supply Chain Mgrs. AIME Americas Asia AUSAPAC Europe Global Manufacturing Manager Production Planning Manager Customer Service Manager Global IS Representative Provide leadership to team Align team members with overall objectives Act as conduit between team and GLT/Board Act on delegated authority from Chief Executive, Operations Provide day-to-day leadership and ensure team objectives are met Set team agenda Ensure timelines and targets for initiatives are met Facilitate sharing of best practice across regions Provide holistic view of supply chain performance, costs and impact of major proposed changes to SBU management Provide regional input/insight on issues Identify and share best practice from within regions Identify regional improvement initiatives for assessment and implementation Act as conduit between Supply Chain Team and regions Provide inputs on manufacturing impacts on supply chain optimisation opportunities Use supply chain strategy results and team inputs to develop global manufacturing strategy Act as conduit between Supply Chain Team and dairy companies for issues with long term implications Provide inputs on production planning impacts on supply chain opportunities Facilitate KPI setting and tracking for NZ based operations Act as conduit between Supply Chain team and dairy companies Provide inputs on customer service impacts on supply chain opportunities Facilitate KPI setting and tracking for NZ based operations Act as additional conduit between Supply Chain team and operating companies Provide inputs on systems requirements and impacts of supply chain strategies, processes Enable implementation of strategies with systems solutions, as necessary Act as a conduit between Global IS and Operations Member Role

AGREE APPROPRIATE MEMBERSHIP AND ROLES (II) : 

Fortnightly/ monthly meetings, individual counselling 40% 100% approximately 6 months Steering committee Global sponsor (also on steering committee) Coordination team leader Shared accountability for success Active leadership Provide visible support and commitment, communication Challenge, improve team solution, recommendations Unblock politics, ensure direct reports committed Appointments Primary accountability for success Responsible for overall Program design, resourcing, timeline, reporting, quality of solution, success Responsible for creating the conditions of success for the Coordination Team and Task Forces Day-to-day responsibility for team activities Management of team dynamics, calendar, output, quality, integration of issues, challenging team solution Surfacing of issues for Steering Committee attention/decisions ‘Finger on the pulse’ to recommend modifications to design, structure, etc Champion of the change process in the organization AGREE APPROPRIATE MEMBERSHIP AND ROLES (II) Example Team Roles And Responsibilities (I) Client Example Appendix Estimated Time Commitment Group Roles And Responsibilities

AGREE APPROPRIATE MEMBERSHIP AND ROLES (III) : 

For at least first 3 months ~10-20% Coordination team members Regional/ functional/ team sponsor Contribute regional/SBU/functional knowledge to Team Web to ensure integrated solution Develop deep understanding of overall solution and process, and become a champion Execute Team Web workplan, with focus on regional/SBU/ functional responsibility Will also be regional/functional/process team leader Shared accountability for success Input to, challenge, emerging regional solution Be familiar with and committed to rationale and approach to change Liaise with co-sponsor on solution, appointments Ensure sufficient quality resources provided to address regional/functional/process issues AGREE APPROPRIATE MEMBERSHIP AND ROLES (III) Example Team Roles And Responsibilities (II) Client Example Appendix Estimated Time Commitment Group Roles And Responsibilities

C. LAUNCH TEAM AND DEVELOP PROTOCOLS : 

Decision Type Requires global consistency Impacts multiple regions Impacts single region/market Impact is cross-functional (eg change in service level) Increases short-term costs but provides long-term benefits Approach Team consensus Team consensus Consensus between Global SC head and impacted regional rep Team consensus followed by consensus between Global SC head and impacted function head Team consensus followed by consensus between Global SC head and impacted functional head Authority Global Operations head Global Operations head, Regional SBU heads Global Operations head, impacted Regional SBU head Global Ops. head, impacted function head Impacted business head, Global Ops. head Initial Quarterly workshops Monthly teleconferences by sub-teams Bi-weekly electronic updates Ongoing Biennial to annual workshops Quarterly teleconferences Monthly update Decision-Making And Conflict Resolution Communication Example Protocols: Global Supply Chain Team Client Example Appendix C. LAUNCH TEAM AND DEVELOP PROTOCOLS

D. DEVELOP NECESSARY PROCESSES (I) : 

Key Process Steps Develop broad set of performance measures segmented by SBU, category Crystallise broad measures to smaller subset of key indicators Develop common definitions, tracking methods Define reporting and feedback processes Develop guidelines for customization, as necessary Identify markets with similar characteristics eg level of sophistication Develop 4-5 homogenous market groupings for internal comparison Develop baseline performance across all markets Identify current internal benchmarks for input into target-setting Identify internal and external benchmarks for each KPI, segmented by SBU Category Market bucket Agree monthly, annual targets Develop and agree process for evaluation Communicate performance within and across market buckets to operating companies Present global KPIs, variances, and status of recommended actions to Global Head Identify market buckets for internal benchmarking Highlight key issues and recommend options Communicate results Define Global KPIs High Level Process - Setting Performance Standards, Monitoring And Challenging Performance Develop and agree KPI targets Collect and synthesise monthly data per reporting process Compare performance within market buckets and with agreed upon targets Isolate systemic versus idiosyncratic issues Identify options to address systemic issues Use monthly KPI data to identify opportunities beyond agreed targets Mobilise resources and assign responsibilities to capture opportunities Ensure implementation and monitor progress Identify initiatives, opportunities Collect, synthesise KPIs Identify internal, external benchmarks Global marketing and supply chain strategic plans Example Key Team Processes: Global Supply Chain Team Client Example Appendix D. DEVELOP NECESSARY PROCESSES (I)

D. DEVELOP NECESSARY PROCESSES (II) : 

Quarterly Team Meeting Develop global strategy Develop consistent business processes, tools Set performance standards Monitor and challenge global performance Identify and capture global opportunities Knowledge transfer Monthly teleconference Biweekly updates x x x x x x x x D. DEVELOP NECESSARY PROCESSES (II) Example Calendar: Global Supply Chain Team Client Example Appendix Agenda Item

E. DETERMINE COLLECTIVE ACCOUNTABILITIES (I) : 

E. DETERMINE COLLECTIVE ACCOUNTABILITIES (I) SBU Key Performance Indicators Relative Importance Of Different Measures Global Category Director Regional Managing Director Number of new products developed New products share of revenues Customer retention Revenue growth Volume growth EBIT % of revenues EBIT growth Market share growth Product launches compared to budget A&P per MT/% of sales Customer satisfaction index Implementation of KAM Revenues versus budget Volumes versus budget EBIT versus budget Market share versus plan Long Term Short Term (£ 12 months) Input Measure Output Measure Performance Measurement Framework For Roles With Collective Accountabilities Client Example Appendix Note: KPIs should include both financial and non-financial measures for Group Category Directors and Regional MDs

E. DETERMINE COLLECTIVE ACCOUNTABILITIES (II) : 

Accountabilities Nature Of Interaction Contribute to strategy development as an active, participating member of the SBU Management Team Establish financial criteria and benchmarks required by the SBU Participate in the identification and evaluation of performance improvement opportunities, including investment and divestment opportunities Oversee the preparation of required reports and analyses on SBU performance relevant to the SBU Management Team and the global category teams Participate in the identification of business solution and support service requirements to facilitate achievement of the strategic plan Undertake assessment of major capex proposals and manage capex reviews Assessment of SBU financial performance against budget/forecast, including high-level variance analysis and identification of improvement opportunities Participates as an actively contributing member in regular meetings with the SBU Management Team Day-to-day interaction for strategic and tactical advice Responds to ad hoc issues on a need to basis, eg in connection with major decisions, investments or acute problems Driven from the global framework, determine the financial management control framework which meets the specific needs of the SBU Information requirements Systems Standards and policies Benchmarking standards and targets Ensure that appropriate linkages between global SBU Finance, Global Finance and regional/local finance are maintained Oversee the preparation of required reports and analyses on SBU performance relevant to the GLT Regular and frequent contact within the Global Finance Leadership Group Regular interaction with CFO and functional global managers (accounting and reporting, treasury, tax) for functional requirements and advice As required, raise issues for prioritisation and direction; respond to ad hoc issues Group MD (SBU) CFO Global Finance Manager (SBU) Reporting Relationship Example Accountabilities: Global Finance Manager (SBU) (1) E. DETERMINE COLLECTIVE ACCOUNTABILITIES (II) Client Example Appendix (1) Lead manager