Designing the Organization Structure & Governance Model

April 30, 2009

Gwen Callas-Miller Textron Sue Todd Corpu

The CorpU Member Network

A private network serving learning and talent executives since 1997

Human Capital Challenges

Achieve L&D Excellence

Align learning with key business priorities Organize L&D to support continuous business change

Strengthen Leadership Bench

Speed throughput of leadership pipeline Improve HiPo identification & development Meet changing generational needs Engage leaders as teachers Ensure managerled development Develop strong succession plans

Become Employer of Choice

Attract the best talent in the industry

Drive Business Impact

Support top line growth Reduce cost Increase profit per employee Accelerate success of mergers & acquisitions Support global growth Improve performance management

Achieve top quartile retention of key people

Improve overall employee engagement & loyalty Become a great place to work

Execute learning program design and delivery efficiently

Measure the impact of learning

Three Basic Models

Centralized
Strong coordination through central core team Reports to single learning executive Accountability for enterprise-wide budget, resources, L&D talent and external partnerships

Decentralized
Business units own and operate independent L&D teams BU L&D teams sometimes form Council to share best practices; little to no enforcement Challenged to address enterprise change initiatives

Federated
Central core team develops enterprise programs, sets and enforces standards, manages enterprise systems

BUs responsible for local learning and delivery for enterprise programs

Varied Organizing Models

Characteristics of L&D Organizing Decisions

Centralized STRENGTHS
Strong control over all aspects of L&D, and central integration points to HR processes

Decentralized
Empowers BU L&D teams who are in a good position to understand the needs of the customer Allows freedom and ownership among training groups

Federated
Balances freedom with control among the central team and separate BU L&D organizations Fosters a strategic longer-term approach through agreements between operating units

Decision-making concentrated in the hands of a single group

Provides a single voice to ensure consistent messages across the enterprise

Eliminates redundancy

Provides quick response to immediate needs of line managers

Addresses redundancy issues without diminishing BUs ability to focus on local needs
Creates opportunity to appreciate diverse approaches, and standardize the best ones

Programs are perceived as being more relevant to the needs of the workforce

Easier to develop brand and strengthen reputation of a single identity

Early Centralized Model

Strengthening Connections to the Business

Centralized WEAKNESSES
Eliminates diversity across programs that can provide insights on the Voice of the Customer Programs and services may not adequately serve the unique needs of the business units

Decentralized
Fosters fragmentation and duplication of effort

Federated
Consensus decisionmaking can delay action

Difficult to create common skills and approaches across the organization

Some L&D teams may opt out of agreed programs

Can lead to weaker relationships with business unit managers

Often not strategic due to focus on daily challenges

Tough to redistribute budgets to address changing enterprise objectives

Programs may have a corporate flavor

Potential to put local priorities above corporate objectives

Central team can be viewed as being reactive

Centralized STRENGTHS
Strong control over all aspects of L&D, and central integration points to HR processes

Decentralized
Empowers BU L&D teams who are in a good position to understand the needs of the customer Allows freedom and ownership among training groups

Federated
Balances freedom with control among the central team and separate BU L&D organizations Fosters a strategic longer-term approach through agreements between operating units

Decision-making concentrated in the hands of a single group

Provides a single voice to ensure consistent messages across the enterprise

Eliminates redundancy

Provides quick response to immediate needs of line managers

Addresses redundancy issues without diminishing BUs ability to focus on local needs
Creates opportunity to appreciate diverse approaches, and standardize the best ones

Programs are perceived as being more relevant to the needs of the workforce

Easier to develop brand and strengthen reputation of a single identity

Decentralized Structure

Centralized WEAKNESSES
Eliminates diversity across programs that can provide insights on the Voice of the Customer Programs and services may not adequately serve the unique needs of the business units

Decentralized
Fosters fragmentation and duplication of effort

Federated
Consensus decisionmaking can delay action

Difficult to create common skills and approaches across the organization

Some L&D teams may opt out of agreed programs

Can lead to weaker relationships with business unit managers

Often not strategic due to focus on daily challenges

Tough to redistribute budgets to address changing enterprise objectives

Programs may have a corporate flavor

Potential to put local priorities above corporate objectives

Central team can be viewed as being reactive

Centralized STRENGTHS
Strong control over all aspects of L&D, and central integration points to HR processes

Decentralized
Empowers BU L&D teams who are in a good position to understand the needs of the customer Allows freedom and ownership among training groups

Federated
Balances freedom with control among the central team and separate BU L&D organizations Fosters a strategic longer-term approach through agreements between operating units

Decision-making concentrated in the hands of a single group

Provides a single voice to ensure consistent messages across the enterprise

Eliminates redundancy

Provides quick response to immediate needs of line managers

Addresses redundancy issues without diminishing BUs ability to focus on local needs
Creates opportunity to appreciate diverse approaches, and standardize the best ones

Programs are perceived as being more relevant to the needs of the workforce

Easier to develop brand and strengthen reputation of a single identity

Federated Structure

Centralized WEAKNESSES
Eliminates diversity across programs that can provide insights on the Voice of the Customer Programs and services may not adequately serve the unique needs of the business units

Decentralized
Fosters fragmentation and duplication of effort

Federated
Consensus decisionmaking can delay action

Difficult to create common skills and approaches across the organization

Some L&D teams may opt out of agreed programs

Can lead to weaker relationships with business unit managers

Often not strategic due to focus on daily challenges

Tough to redistribute budgets to address changing enterprise objectives

Programs may have a corporate flavor

Potential to put local priorities above corporate objectives

Central team can be viewed as being reactive

Tug and Pull of Centralization Vs. Decentralization

Centralizing Knowledge

Centralization

Decentralization Decentralizing Activity

Improvement of Knowledge Activity Improvement of Activity

Source: Trompenaars, Fons. 21 Leaders of the 21st Century. 2001

Centralizing 17

L&D as Business Partner:

A Model for Governance and Execution within a Large Organization

April 30, 2009 Gwen Callas-Miller Exec. Dir., Global Leadership Development

Company Confidential

Company Confidential

18

Quick Facts About Textron

Headquartered In Providence, RI Approximately 38,000 Employees in 29 Countries Manufacturing Operations in 20 Countries 2009 Fortune 500 Ranking: 173

NYSE: TXT

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Leading Branded Businesses

Cessna
40%

Bell
20%

Textron Systems
15%

Industrial
20%

Finance
5%

Cessna Aircraft

Bell Helicopter

Textron Systems

E-Z-GO Greenlee

Textron Financial

Jacobsen
Kautex

2008 Textron Inc. Revenue: $14.25 Billion

Note: Percentages reflect portion of 2008 Revenues

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Transforming Textron Our Ongoing Journey to Premier

VISION:
To be the premier multi-industry company, recognized for our network of powerful brands, world-class enterprise processes and talented people

NETWORKED ENTERPRISE A Simpler, More Focused Portfolio of Leading, Branded Businesses in Attractive Industries

Enterprise Management
How We Manage What We Own

Portfolio Management
What We Own
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Results of Transformation
Pre-2001
Decentralized, holding company
Businesses insulated Redundant activities, spend Limited sharing of talent Decentralized learning model
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Today
Networked organization

Common processes
Horizontal councils for functions

Enterprise-wide values, development

Federated learning model

Talent Development as Key Element of Transformation

Pre-2001
Continuum of development resources across businesses Haves and Have Nots Top level succession focus Two executive development learning programs

Today
Enterprise COE for talent:
Learning (Textron Univ.) Performance Management Vertical /Horizontal Succession

Career Development
Engagement Change Management

Businesses responsible for unique needs Tight collaboration with BUs through governance structure
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Textron Universitys Role in Transformation

Level the playing field for high quality, consistent and cost effective learning Focus on enterprise learning strategy linked to business and needed across the company leadership, functional excellence and business skills Viewed by CEO, Leadership team as an enabler to developing talent and providing a mechanism to bring leaders together to drive desired culture

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Governance Structure & Flows

Transformation Leadership Team

External Benchmark Sources

Textron University Advisory Group

Textron Councils Functional Requirements

HR Leadership Council Textron University Lead Executive Talent Development Advisory Group BU L&D Performance Solutions Managers Leadership & Functional Requirements Textron Univ Support Team Design & Execution

Textron University Team

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Role of L&D Advisory Group

Serves as voice of the customer on annual strategic learning plan Functions as extended TU team by participating in program design, supplier assessment, executing communications and getting local consensus on priorities Collaborative partnership for the most part Members value:
Opportunity to shape learning beyond their BU boundaries, and Share best practices across businesses
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Textron University Advisory Group

Textrons Transformation Leadership Team (Management Committee & all Business Unit CEOs)

TUAG Chair Chief HR Officer, & Management Comm.

EVP Government, International & Management Comm. Dep. Managing Dir. Global Tech Center India

Industrial Segment President

EVP Operations Bell Helicopter

VP HR Cessna

EVP Strategy, Textron Exec. Dir. Global Leadership Development, Textron

Asst. Controller Textron

EVP, Chief Counsel Textron Financial Company

Senior Team of Top BU and Function Executives

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Role of the Governing Board

Ensures strategic objectives are aligned with enterprise objectives

Serves as a decision making body, accountable to make choices on priorities and investment
Evaluates ongoing performance and value of Textron University to the enterprise Members serve as champions demonstrate executive commitment to learning as a strategic enabler

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5 Key Dimensions of Governance

1. Accountability Making a commitment to deliver measurable business results 2. Operational Effectiveness Driving out costs and pursuing optimal efficiency 3. Program and Service Quality Establishing and enforcing quality standards 4.
Effective Controls

Accounting for and controlling expenses across the enterprise 5. Adherence to Enterprise Priorities Maintaining site of corporate objectives in relation to local needs

Marks of Good Learning Governance

Clear view of how business strategies are enabled by key learning programs Executives engaged and able to describe workforce capability plan

Formal planning and communications processes to keep BU leaders informed about strategies

Business objectives measured to evaluate learning investments

Costs decreasing on operational processes

Governance Mechanisms
Decisions, Policies, Processes
Financial
People
Roles & Responsibilities Shared Services Process Owners Program Funding Model Service Usage Fees Infrastructure Funding

Portfolio
Programs LearningServices Facilities and Technologies

Program Oversight

Strategic Planning Process

Programs

Rationalization Process Shared Artifacts

DRIVEN BY EXECUTIVES

Enforce Standards Enforce Policies

Operations

Learning Platform Requirements Definitions Exception Policy Data Admin Controls Data Standards Reporting Policy

Talent Processes Performance Processes Work Force Utilization

Technology

Integration

Information

Centralized Model With Governance

Governance for Decentralized Model

Managing Partner
(Elected to 2-year term)

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Governance for Federated Structure

Executive Committee

Learning Core Team

Group Leader Principal Advisor

Curriculum Designer

Curriculum Designer

Curriculum Designer

Curriculum Designer

Curriculum Designer

Curriculum Designer

Curriculum Designer

Name

Name

Name

Name Asset Mgmt

Name

Name

Name

Name

Name

Name

Name

Name

Name

Name

Mining

Diamonds

Finance

Shipping

Procurmnt

HR

Leadership

Marketing

Community Relations

HSE

Exploration

Project Mangmnt

Continuous Improvmnt

Training Curriculum Sponsors

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Regional Capabilities
Performance Consulting LMS Administration Solution Sourcing Vendor Management Training Delivery Logistics Localization

Business Unit Training

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Operational

Site Specific Training

HSE

Certification

L&D as Business Partner:

A Model for Governance and Execution within a Large Organization

April 30, 2009 Gwen Callas-Miller Exec. Dir., Global Leadership Development

Company Confidential

Company Confidential

35

Q&A

36

Upcoming Webinars
Driving Innovation in Enterprise Learning with Web 2.0 and Social Networking Learning Brand in Action: University of Farmers

May 20, 2009 11:00 a.m. 12:00 p.m. EDT

June 9, 2009 2:00 p.m. 3:00 p.m. EDT