Robert Bosch SUCCESSION PLANNING Challenges in Diversified Manufacturing

Robert Bosch SUCCESSION PLANNING

Challenges in Diversified Manufacturing Leadership Ø Industry Challenges (cost and quality) Ø Succession/recruitment Ø Mentorship declines Ø Millennial Implications Ø Mid-advanced career developmental actions Ø Linked Compensation Systems Ø Diversity of all types

Diversified Manufacturing Optimization Through Leadership & Organizational Excellence Evidenced Based Leadership Development Improved Leadership Improved Organizational Performance Improved Financial Performance

The Intersection of Diversified Manufacturing Leadership

Manufacturing Competency Based Modeling Process

Core Principles Underlying Succession Planning • Leaders really do matter … in managing/driving accountability, results, culture. • Performance is what counts … top performers over high potentials the “what” & “how” both count. • Today’s top performing leaders aren’t necessarily tomorrow’s … even our best leaders can fall behind or derail. • Talent is an enterprise resource … willingness to share talent makes the system work. • A broad set of experience & assignments is the best classroom … yet a balanced approach is still necessary for development. • It’s incumbent upon today’s “top-performers” to leave a legacy of future talent … current leaders must teach, mentor, & role model others on what it takes to succeed. • Invest in the best … focus the rest.

FOUR LEVERS FOR LEARNING 5 -1 51 0% 25 -30% 0% 55 -65%

“There are two kinds of people in organizations: Those with 20 years experience and those with one year’s experience repeated 20 times. ” —Gene Dalton, BYU

Leadership Development = V+C+L Variety of Experiences + Challenging Assignments + Ability & Willingness to Learn —Center for Creative Leadership

Succession Planning: Key Elements Assessment of Key Positions Identification of Key Talent Development Monitoring & Review Key Elements Assessment of Key Talent Generation of Development Plans

Succession Planning: Key Elements 1. Assessment of Key Positions: • What are the competencies and experiences needed to qualify for each key position? 2. Identification of Key Talent: • Typically people at the top two levels of the organization and high potential employees one level below. • Identified by their management’s assessment of their performance and potential for advancement. 3. Assessment of Key Talent: • For each person on the radar screen, primary development needs are identified focusing on what they need in order to be ready for the next level.

Succession Planning: Key Elements 4. Generation of Development Plans: • A development plan is prepared for how we will help the person develop over the next year. 5. Development Monitoring & Review • An annual or semi-annual succession planning review is held to review progress of key talent and to refresh or revise their development plan.

General Objectives Leadership Continuity To identify key contributors that have the leadership potential to fulfill the organization’s vision, goals, and business strategy. To accelerate their development. To maximize the organization’s bench strength: have the right person for the right job at the right time. To nurture your future leaders

Leading Through Succession Planning is Not an event, but rather a PROCESS, Not an Event. Lead through selection. Lead through development. Lead through Retention.

Selection Process Four Effective Predictors of Leadership Potential 1. Actual performance. 2. Feedback on Candidates effectiveness. 3. Absence of derailment factors in the Candidate’s profile. 4. Candidate’s cognitive ability and personality characteristics.

Leadership Motivating others to pursue a collective goal. It is influence & persuasion, not domination. Creating cohesive and mission-oriented teams. Directly related to team performance.

Effective Predictor 1 Actual Performance Evaluate actual performance of candidate’s team or organizational unit. Evaluate real-time performance data: Sales Expense control Profit Productivity

Effective Predictor 3 Derailment Factors Look for these tendencies which are proven correlates of managerial careers that flounder, stall, or derail. Overly controlling Exploitative Micro-manage Resist using appropriate consequences Arrogance Overly Political Egotistical Irritable Passive-aggressive Vindictive Abrasive Insensitive Aloof

Effective Predictor 4 Psychological Characteristics Intelligence & intellect. Innovative, broad-minded, curious, willing to take risks, and possessing raw intellectual horsepower. Conscientiousness: Prudent, will to achieve, responsible, solid integrity, strong work ethic, planful and organized. Sense of Urgency: Assertiveness and Ego Drive: being extraverted, high- energy, fluent speaker, desire to advance, eager decision maker, and persuasive. Emotional Stability: This involves Ego Strength: being self-confident, selfaccepting, balanced, stress resistant, tolerant of uncertainty, graceful under pressure, flexible, and effective at handling conflict and negative feedback. Agreeableness: Being empathic: understanding, cooperative, friendly, effective communicator, trusting, and good natured.

Development Process The Data Platform 1. Build a position profile: Identify the Critical Success Factors for the position. 2. Assess candidates for leadership skills and styles, strengths, gaps, and potential. 3. Design a developmental action plan for each candidate and incorporate it into their performance management process.

The Position Profile Review current job description and identify any needed revisions. Interview current job holder to assess for Critical Success Factors. Gather input from key internal & external customers. Build an Ideal Profile.

Assess Candidates Assess by design, not by chemistry Interview for motivational determinants. Collect 360 data for leadership skills and leadership styles. Test for intelligence and emotional factors: Caliper Profile 16 PF Di. SC Conduct a “gap analysis” Where you are vs. where you need to be.

Design Action Plan Debrief candidate and manager on overall assessment findings. Discuss the gap analysis comparing findings with CSFs for the job. Have candidate design a Blueprint for Action for their development plan. Reach consensus on the candidates plan and ensure it is fully linked to the company’s going-forward strategy.

SUCCESSION PLAN POSITION INCUMBENT NOW 1 -2 YEARS 3 -5 YEARS EVP Operations John Doe Linda Evans Kevin O’Conner Conrad Reagan

HIGH POTENTIAL & PROMOTABLE SUMMARY NAME TITLE LOCATION SALARY CODES HIGHEST ATTAINABLE POSITION Linda Evans $00, 000 FWX VP Operations Ready in 1 -2 years X-Functional assignment to Operations Successful mentorship role Community service involvement Kevin O’Conner $00, 000 XF CFO Ready in 3 - 5 years X-Functional assignment to Finance $00, 000 X VP Business Development Ready in 5+years Continue education. Conrad Reagan CODES W = Female M = Minority AVAILABILITY ISSUES F = Cross Functional Potential X = Cross Divisional Potential P = Female/Minority

LEADERSHIP ASSESSMENT SUMMARY DIRECT REPORTS Exceeds Standards R E S U L T S POTENTIAL Linda At Standard High Potential Kevin Promotable Conrad Experienced Professional Manage Out Below Standard Too New Below Standard At Standard BEHAVIORS Exceeds Standard

Define The Candidates High Potential: An individual who has demonstrated the capability to make two vertical moves within the organization within a 3 -5 year time frame. Promotable: An individual who is capable of making one vertical career move within a five-year time frame. The end result would be a position with more scope and complexity and greater responsibility for dollars, people, capital resources, decisions, etc. This person occasionally exceeds and never misses high expectations. Experienced Professional: A strong individual contributor or manager that is highly competent, respected and continues to meet raised expectations. Manage Out: This individual needs to be removed from the position and /or the organization. An upgrade in talent should be moved in from the succession plan or from outside the company. This person is either not meeting or will not in the future meet raised expectations. Too New: This person has typically been with the organization or in a new role for fewer than six months.

A Final Word “You won’t remember, when you retire, what you did in the first quarter of 2012, or the third. What you will remember is how many people you developed. How many people you helped to have a better career because of your interest and your dedication to their development. ”