Cultural Levers – Values & CBS Workshop

Colfax Vision – Context For Values & CBS

We are dedicated to creating an enduring premier global enterprise built on a unique business culture that…….

• Does all things with integrity, respect and candour • Has a deep commitment to excellence to associates and customers as its foundation • Is known for consistent delivery of world-class performance 2

Where Are We Headed?

•

Group Exercise – Fill in the missing blanks!

To be the world’s leading application engineer providing lifetime solutions in air and gas handling • 2015 o Operating profit

??

% (from

??

%) o Sales +

??

% o Working Capital

?

% (from

??

%) • • Values led performance culture Values & behaviours in performance management

What can you as leaders do to contribute to these goals? How will Values & CBS support you to making this contribution?

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Living Our

Values

Values – workshop aims and objectives

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Aims

• Introduce Colfax values in the context of your business • Confirm how you as leaders will live out and support the Values and behaviours • Confirm your leadership roles & responsibilities in relation to upholding & embedding Colfax Values • • •

Objectives

You will gain insight into how successfully you currently role model our Values You will be able to identify behaviours that underpin and exemplify our Values in your teams You will be able to consider Values & Behaviours in relation to the PMP

Values – what do you think?

6 • Objective is to get you to think about Colfax’s values • I am going to ask 4 questions (5 minutes per question) – For each question, you need to stand in front of the appropriate Value – Go with your ‘gut feel’ & don’t just follow others – own your choice!

– Think about why you have chosen the particular Value • What do you like about it? What do you struggle with?

• What are the challenges facing you and the Crude & Coking Team in living out the Value?

• We will have a chance to share our thoughts and have a brief discussion

Why the mandate for Values?

7 •

“when Participants demonstrate company values, company stock appreciates by 1.1percent” - Watson Wyatt

•

“Corporate values helped save Xerox during the worst crisis in our history ……… living our values has been one of Xerox’s five performance objectives for the past several years” - Xerox, CEO Anne Mulcahy

•

“Change may not happen overnight, however as we learn and better understand how to live these values I know they will become the true bedrock of our Company, and that Colfax will become the world class company that we all envision” - Steve Simms, President & CEO Colfax

Customers Talk, We Listen

Maintain a constant focus on quality and speed Create unique, value-added and differentiated solutions Execute robust, repeatable processes that consistently meet or exceed customer expectations Promote positive problem resolution Earn our customers’ business 8

The Best Team Wins

Exhibit high integrity and respect for others Seek fact-based, root-cause solutions, not blame Be non-political and non-bureaucratic Demonstrate a high sense of urgency Have a strong level of accountability Strive for a safe work environment Take satisfaction in being a valued member of a winning team 9

Continuous Improvement Is Our Way Of Life

Step out of comfort zone by setting stretch/breakthrough objectives Demonstrate mastery of CBS tools to help build process capability Experiment and learn every day Eliminate waste proactively and continuously in every aspect of our business processes Benchmark the best, and then better them 10

Innovation Defines Our Future

Generate breakthrough ideas for technology, products, solutions and processes Provide differentiated customer solutions Create products and services that improve quality of life and environmental stewardship Deliver above market growth 11

We Compete For Shareholder Value

Develop strong, comprehensive strategic plans Build effective operating plans to execute the strategic plan Drive toward absolute best-in-class results to maximize profits, working capital and cash flow 12

We Live Our Values

CUSTOMERS TALK, WE LISTEN The voice of the customer will always drive the development of our strategic plans and actions.

THE BEST TEAM WINS Team-oriented, involved associates are our most valuable resource, and we are passionate about attracting, developing and retaining the best talent.

CONTINUOUS IMPROVEMENT (KAIZEN) IS OUR WAY OF LIFE Set breakthrough objectives, experiment and learn every day, eliminate waste in our business processes, and benchmark the best, then better them.

INNOVATION DEFINES OUR FUTURE Individual and organizational creativity will drive breakthrough ideas for technology, products, solutions and processes. WE COMPETE FOR SHAREHOLDERS BASED ON OUR PERFORMANCE To consistently attract and retain loyal shareholders, we must deliver best-of-class results for profits, working capital and cash flow.

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Embedding Values – PMP overview

- Integrates the

Colfax Values

management process into the performance - Reinforces our and emphasizing achievement of individual performance objectives

performance-based culture

by including - Establishes a

consistent review process

throughout all businesses 14

Values – Role Of The Leader

15 • In groups of three or four, define a short statement that describes the role of senior management in relation to embedding Values • Explore what actions you might take that illustrates your commitment to developing a values led culture • Describe the top three actions required to illustrate “what good looks like” in relation to your role definition (What you specifically have to do/be) • Present your rationale to the other group

Values Led Performance Culture

• Brainstorm as many leadership challenges as possible that you will face in truly embedding a values led, performance focused culture • Rank the top 3 challenges from the list and record on the ranking chart/decision matrix • Calculate the top 3 for the group • Use 5 whys to identify potential root causes • Brainstorm what potential actions might be taken to resolve them and record these on must/could/should flip charts. • Agree one “must do” SMART action for each challenge 16

Performance Excellence

CBS

CBS – workshop aims and objectives

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Aims

• Introduce CBS in the context of your business • Explore how you will apply CBS and its implications on how your business operates • Confirm your leadership roles & responsibilities in relation to upholding & embedding CBS • • •

Objectives

You will gain insight into the key CBS tools You will be able to determine how to begin to apply CBS into your business You will be able to consider how CBS will support the integration of your business into Colfax

CBS – What is it?

Group Exercise

– 10 minutes

• How would you describe CBS?

• How do you think it will make your business even better?

• How will CBS help your business to integrate into Colfax?

• What is new / what is the same with how your business presently operates? 19

CBS – What is it?

It is what we do, how we do it and why we do it (the difference we make)

A Consistent and Reliable track record in World Class Performance is achieved when we: •

Listen to the voice of the customer

, responding to their needs and performance expectations, establishing measurable goals for delivering World Class performance in Quality, Delivery, Cost and Growth. •Enable the

best team of people

to develop a solid strategic plan, supported by a disciplined process that delivers customer value.

•Leverage a culture of

Continuous Improvement

in order to continually improve against high performance targets. •Apply our improvement effort to those processes and activities which are

value adding

and which contribute to meeting the performance standards required by our customers. •Work together as

winning teams

to achieve these goals.

CUSTOMERS TALK WE LISTEN THE BEST TEAM WINS CONTINUOUS IMPROVEMENT (KAIZEN) IS OUR WAY OF LIFE INNOVATION DEFINES OUR FUTURE WE COMPETE FOR SHAREHOLDERS BASED ON OUR PERFORMANCE

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CBS Leadership

Quotes on Culture •

“We have hired talent that valued our strategy but after a short time did not identify with our CBS culture and either left or transitioned.”

•

“We have acquired businesses that are struggling to align their associates in a committed way to CBS – and their results reflect this.”

•

“When strategy and culture clash, culture wins” – Lou Gerstner (former CEO IBM)

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CBS Leadership

Cultural Perspective

The Colfax CBS culture is:

• an unique, sustainable competitive advantage • not easily replicated

The CBS concepts, tools, and values facilitate a process and results oriented culture enabled by:

• stretch goals • • disciplined execution clear accountability • passion for winning

We must understand the elements of the CBS culture to:

• drive our success • provide clear and consistent communication • reinforce and perpetuate the CBS culture 22

Process and Results Culture

Core Leadership Elements

Process

Policy Deployment Daily Management Countermeasures Kaizen events Lean tools VOC Growth tools Talent review

Results

Breakthrough results KPI results Root cause solutions Continuous improvement SQDC(WC) results Customer satisfaction Growth and innovation CBS leadership capability 23

CBS Immersion for Senior Leaders

Definition and Purpose

What is CBS Immersion?

• A 4-12 week program for new senior leaders beginning the first week of employment with Colfax.

What is the purpose?

• • • • • Immerse new hire in the tools and culture of CBS system before the leader becomes deeply engaged in their new position Rapid assimilation into the business through active participation in Kaizen events, Policy Deployment meetings, and Operating Reviews Build a network of associates across the company Understand the role of leaders in driving CBS and our values Confirm expectations going forward in position 24

CBS – Where Do We Begin?

POLICY DEPLOYMENT

STRATEGIC PLAN

DAILY MANAGEMENT KPI’S VALUE STREAM MAPPING

FOCUS FOR OUR KAIZEN EVENTS

• • • World class performance starts with the creation of a strategic plan which takes into account the voice of the customer. The approach we will adopt in delivering performance improvement will derive from one of 3 sources; performance issues highlighted by existing management KPI’s; opportunities for continuous improvement highlighted via value stream mapping activities ;and breakthrough improvement opportunities as identified by Policy Deployment. We employ the CBS toolkit and Kaizen methodology to facilitate delivery of our performance goals and ultimately the strategic plan.

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CBS – Policy Deployment (PD)

•

Policy Deployment( PD) is a process that facilitates the creation of:

Results-Oriented Business Processes

With

Sustained Improvement

That Result In • •

Sustained Competitive Advantage in Quality, Delivery, Cost and Innovation

The focus of Policy Deployment is not in the delivery of one off or incremental improvements to our processes but is focused on delivering, in the eyes of our customer, Significant change to our processes such that it requires the Organisation to stretch itself.

It relies invariably on cross functional teamwork, thinking very differently and challenging the norm in other words engaging in “Breakthrough thinking”. The prize is characterised as “Big Wins” and process changes which are Sustainable and can achieve improved results year after year.

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CBS – The Toolkit

Using the CBS toolkit we can improve customer satisfaction, improve total business lead time and eliminate unnecessary activities and costs that do not help our customers or their business.

POLICY DEPLOPMENT VALUE STREAM MAPPING STANDARD WORK 5S - VISUAL MANAGEMENT SETUP REDUCTION (SMED) MATERIAL AND INFORMATION FLOW VARIATION REDUCTION TOTAL PRODUCTIVE MAINTENANCE TRANSACTIONAL PROCESS IMPROVEMENT ENERGY REDUCTION 3P/DESIGN VALUE SELLING PROCESS

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CBS – Applies To Everyone

28 SALES ENGINEERING LEGAL HR FINANCE MARKETING I.T.

MFG SUPPLY CHAIN

CBS Leadership

Expectations

Colfax’s growth ambition requires leaders to:

• • Hire/acquire the best talent Assimilate talent quickly into our CBS culture

Colfax holds our leaders accountable for:

• Ensuring their teams actively embrace CBS • Creating a CBS culture and way of doing work

Newly hired and/or acquired leaders must learn fast!

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