Creating Value through Values Workshop MRH Congres Stockholm

“Creating Value through Values” Workshop MRH Congres – Stockholm, May 2008 Patrick Van Aeken

Objectives n This workshop allows participants to… : n … have a better understanding of how values contribute to employee engagement, cultural change (and thus company performance) n … explore different practices for aligning values and performances Page 2

Workshop process n Brief introductionary presentation : n A conceptual framework n The AXA case n Briefing for work in subgroups n Working lunch : work in subgroups n Presentations by subgroups and discussion n Break n Wrap up Page 3

“The best way to do is to be” (Lao Tzu) Results : revenue, profits, welness, … Behaviours Mental models : values, beliefs, aspirations HAVE (product) DO (process) visibility leverage BE (platform) Page 4

The three dimensions of success ACHIEVEMENT : business results, effectiveness, productivity “IT” - Task Exceptional sustainable results COMMUNITY : trust, solidarity, mutual respect “WE” - Relationships ACTUALIZATION : happiness, health, flow “I” - Self Page 5

Ingredients for a remarkable organization (1) IT HAVE Exceptional sustainable results DO BE + WE I Page 6

Ingredients for a remarkable organization (2) I (Self) WE (relationships) IT (Task) HAVE (Product) Engagement Well-being Meaning Happiness Solidarity Connectedness Belonging Mission accomplishment Profitabilty Growth DO (process) Thinking Feeling Acting Competency models on : § Communicating § Negotiating § Coordinating §… Business processes on : § Selling § Delivering § Planning, §… BE (platform) Mental models Personal values Beliefs Culture Shared values Shared beliefs Capital Administrative, technical and economic infrastructure Page 7

Workshop process n Brief introductionary presentation : n A conceptual framework n The AXA case n Briefing for work in subgroups n Working lunch : work in subgroups n Presentations by subgroups and discussion n Break n Wrap up Page 8

Three main era’s in the AXA history of the last 15 years AXA conquers the world The Strategy: § Rapid inorganic growth § Many large international and smaller acquisitions § Becomes #1 in France through acquisition of UAP in 1997 AXA consolidates and professionalizes § Sell off non-core business § AXA Way/six-sigma to encourage consistency and reduction of costs § Launch of international platforms § How do we bring acquisition staff into the “AXA Family”? § How do we integrate the processes of acquired firms? § How do we manage our costs more efficiently? § How do we streamline processes? § How do we give our businesses freedom to win individually in their markets? 1992 – 2000 2001 – 2004 § Where are the most profitable Key Questions: investment opportunities? AXA sets a global customer centric vision § Selected external growth § Additional focus on organic growth – maximizing value § 2012 goal to increase revenues x 2, profits x 3 and become the Preferred Company among stakeholders § How do we honor our mix of cultures and strategies while increasing the value of our Global organization? § What is our differentiated value proposition? § How do we satisfy customers and engage employees? 2005 – 2012 (And Beyond) Page 9

Main cultural drivers linked to these era’s AXA conquers the world AXA consolidates and professionalizes One global ambition : to become the Leader in our industry Clear definition of our business approach : “Everything but” principle : Everything is decentralized, except … Launch of a six sigma improvement program, called “AXA Way” Scope survey Charter describing the “AXA Management Style”, and a set of h 7 corporate values AXA sets a global customer centric vision Launch of Ambition 2012 program : to become the Preferred Company of our stakeholders Scope survey AXA Brand Spirit project “AXA Manager” seminar organised by AXA Corporate University AXAgrams : pictograms Strategy of cultural integration Strategy of operational excellence Strategy of differenciation Page 10

AXA Manager program n Objectives n To familiarize managers with AXA Management Style and AXA values n To enable managers to consider their own management style and the particular improvements they wish to make n To promote the exchange of experience between managers n To help all managers to get to know AXA better n Co-facilitation by consultant and AXA Senior executive ! n Program logistics n A five-day residential program, held throughout the year (4 programs every week !) at one of AXA University’s campuses in Bordeaux n Classes of +/- 20 managers, representing at least 8 countries n Highly participative pedagogical approach n Impact : n Scope survey results over the years showed an important improvement in the application of AXA management principles in the workplace n “… These sessions have made our fast growth possible… They have been key in bringing people together. ” (Françoise Colloc’h, director of HR, communication and Synergies AXAGroup) Page 11

AXAgrams n 28 pictograms, being a visual language : n To communicate the Group’s core values and management philosophy n To promote common understanding of key business concepts among a multilingual and multicultural workforce n Used in internal communications, business presentations, training programs Team Spirit Intrabusiness Innovating By unifying his team, the manager achieves results that are greater than the sum of each individual contribution Each business unit must be managed like a small company within the company. Under no circumstances should the unit’s objectives prevail over those of the company or the Group. In many situations we are often held back by our perceptions, by fear of the unknown and by force of habit. Finding solutions often means deviating from the beaten track. Page 12

AXA Way n Context : striving for “operational excellence” : n Through well known Six Sigma methodology (within AXA re-named “AXA Way”) n With a team of internal consultants (called “Black Belts” ; 1 % of the population) leading improvement projects in all departments of the organisation. n Process : Selection of Black Belts 1 % for each BU specific competency profile Development opportunity for emerging talents Black Belt career 30 months 3 to 4 projects /year in different departments Integration in the business In function of opportunities and motivation If no solution, mandatory integration in initial BU n Benefits : n n n Culture of “operational excellence” spread through the company A generic quality methodology culturally completely integrated Development track for talents Page 13

AXA Business approach n A vision that encompasses : n n A core business : financial protection A brand name and promise : “be life confident” A set of values A responsible corporate strategy n A strategy that includes : n n A business model Segment priorities Geographic priorities Operational priorities Team Spirit Integrity Innovation Professionalism Pragmatism. n Our sources of leverage : n n Developing employee competencies and engagement Strengthening executive leadership Financial Protection involves offering our customers individuals as well as small, mid-size and large businesses - a wide range of product and services that meet their insurance, protection, savings, retirement and financial planning needs throughout their lives. Product Innovation Distribution Management Quality of service Technical excellence Productivity Page 14

Scope survey : from employee satis-faction to employee engagement n The Scope survey exists already for more than 15 years. n Yearly process : Methodological data processing and analysis Distribution of results and feedback Action plans n Since 2006 we focus on employee engagement, through the following model : n n n A Cognitive dimension : Think = Belief in and support for the goals/values of the organization. An Affective dimension : Feel = Sense of belonging, pride, attachment to the organization. A Behavioral dimension : Act = Willingness to go the extra mile, intention to stay with the organization. Think ENGAGEMENT Feel Act n Engagement KPI of staff is integrated in performance appraisal of executives. n Engagement KPI is rising over the years. Page 15

Ambition 2012 : becoming the preferred company To gain the preference, we need to stand out from the crowd in these three areas The third is an outcome of the first two… 2 significant HR initiatives PASSPORT 2012 A personal and individual pluriannual document, helping each AXA employee worldwide to clarify his/her contribution to Ambition 2012 and making managers responsible in supporting their employees. AXA Miles Because we were on track towards the Ambition 2012 objectives, AXA awarded every single employee worldwide with 50 bonus shares in 2007, thus making each employee an AXA shareholder. Another 50 shares are announced for 2009 if results will be on track. Page 16

AXA Brand Spirit : from the “land of promises to the “land of proof” (may 2008) n The new Brand Positioning : AXA, the Financial Protection Company that continuously works to prove it is worth trusting n The new signature : “redefining / standards” n Values remain unchanged… n Three core attitudes were identified in a bottom up approach : attentive, available, reliable Which would make you proud of AXA tomorrow If you were a customer what would make you choose AXA tomorrow RELIABLE (34%) AVAILABLE (51%) ATTENTIVE (34%) ATTENTIVE (39%) PROACTIVE (33%) RELIABLE (38%) AVAILABLE (32%) PROACTIVE (32%) Page 17

It pays off… : financial results 2007 n AXA records solid performance in full year 2007 n n n Underlying earnings up 27 % Ajusted earnings up 22 % Net income up 11 % Henri de Castries, CEO : The reported numbers reflect the combination of a strong organic growth in all our business lines, the successful integration of Winterthur and confirm that our balance sheet is not affected by the subprime crisis Page 18

Workshop process n Brief introductionary presentation : n A conceptual framework n The AXA case n Briefing for work in subgroups n Working lunch : work in subgroups n Presentations by subgroups and discussion n Break n Wrap up Page 19

4 subgroups questions n X n X Page 20

Workshop process n Brief introductionary presentation : n A conceptual framework n The AXA case n Briefing for work in subgroups n Working lunch : work in subgroups n Presentations by subgroups and discussion n Break n Wrap up Page 21

Workshop process n Brief introductionary presentation : n A conceptual framework n The AXA case n Briefing for work in subgroups n Working lunch : work in subgroups n Presentations by subgroups and discussion n Break n Wrap up Page 22

Workshop process n Brief introductionary presentation : n A conceptual framework n The AXA case n Briefing for work in subgroups n Working lunch : work in subgroups n Presentations by subgroups and discussion n Break n Wrap up Page 23

Workshop process n Brief introductionary presentation : n A conceptual framework n The AXA case n Briefing for work in subgroups n Working lunch : work in subgroups n Presentations by subgroups and discussion n Break n Wrap up Page 24