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Management Meeting

Management Meeting. November 2-3, 2004 • Cologne, Germany. Blue Sky . Denise Zutz Vice President, Strategy, Investor Relations and Communication. A program focused on our employees and the environment to benefit our communities. Blue Sky. Why Blue Sky?.

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Management Meeting

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  1. Management Meeting November 2-3, 2004 • Cologne, Germany

  2. Blue Sky Denise Zutz Vice President, Strategy, Investor Relationsand Communication

  3. A program focused on our employees and the environment to benefit our communities. Blue Sky

  4. Why Blue Sky? • Aligned with expectations for sustainability • Builds recognition of good works • Provides a strategic approach to community involvement and philanthropic efforts while furthering business goals

  5. Blue Sky Objectives • Enhance the company image and brand with customers, employees and communities • Provide differentiation from our competitors • Increase employee morale and loyalty • Reinforce global corporate values • Help define and document a culture of leadership

  6. Where we can make an impact, track our results and actively involve employees Blue Sky Development • Ranked potential “global cause” issues • Input from global leadership • Alignment with our businesses • Level of global involvement • Existing investments and programs • Uniqueness • Likely employee interest • Output: Focus on two areas • Environment • Leadership

  7. Environment Strong alignment with businesses and values Many existing activities Globally applicable Wide range of external organizations for alliances Broad potential for employee involvement Leaders Strong alignment with values Develops future leaders to support business growth Helps improve our communities Niche: Resource efficiency (resulting in reduced air and water pollution and reduced waste) Niche: Leadership skills development, ethics, training, diversity, work experience and community involvement Blue Sky Focus Launched May 2004

  8. Leader development strategy Develop by doing Take charge Seek support Increase visibility of leadership activities Communication, public relations As we develop leaders, we help the community Employees give their time and expertise Employees gain new skills through volunteerism and community leadership activities Management roll-out starts today Communicate message to your leadership teams All employee rollout Jan/Feb 2005 Meetings/open houses Employees to articulate their development, past and future Blue Sky Leaders

  9. Partnerships under consideration • Big Brothers / Big Sisters • Mobile Creches • Hope School • Special Olympics Blue Sky Involve Launch: Spring 2005 • Community partnerships • Locations of employees • Ability for participation and volunteerism • Corporate funding of charitable organizations and activities globally • Funding via Johnson Controls Foundation limited by law to the United States • Establishment of new funding mechanism reflects increasing globalization • Considering options

  10. Human Resources / Leadership Development Darrell Middleton – CG, North America Christer Bergstroem – AG, Europe Bob Ellis – AG, North America Environment Paul von Paumgartten – CG, North America Guido Leunens – AG, Europe Marketing / Sales / Customer Relations Michael Su – CG, Asia Garry Cardwell – AG, Asia Bill Nonnamaker – Battery, North America John Fiori – Europe Legal Patrick Nettesheim – Battery, Europe Blue Sky Advisory Council Leadership from across the businesses and the globe Rebecca Andrew, Manager, Blue Sky

  11. Launches are just the beginning Expect leadership to promote and support program and its objectives More to come as expectations of global companies continue to increase Objectives Enhance the company image and brand with customers, employees and communities Provide differentiation from our competitors Increase employee morale and loyalty Reinforce global corporate values Help define and document a culture of leadership Make a difference; improve our environment and the lives of our people and our communities Your leadership is essential! Blue Sky Success

  12. Stronger Leaders, Stronger Company Susan Davis Vice President, Human Resources Global Leadership for Growth

  13. $26.5B $6.1B $1.4B JCI Growth 1984 1994 2004

  14. 30+ countries 500+ locations Johnson Controls Worldwide Locations Global Presence

  15. Session Objectives Involve you • Explore Leader Development as a Strategic Initiative • Review results of the Johnson Controls Leadership Research • Use the Leader Expectations Model

  16. $41.5B $26.5B 2004 2010 Senior Leaders 225 350 470 JCI Growth

  17. Traditional succession plans force organizations to find 75% of successors from outside the organization Inside Outside Fortune 500 Options: Hire or Develop

  18. Traditional succession plans force organizations to find 75% of successors from outside the organization Inside Outside Fortune 500 Inside JC finds 75% of successors from inside the organization Outside Johnson Controls Options: Hire or Develop

  19. Outside Hiring Constraints • Scarcity of outside talent • Not willing to relocate • Promises re: future • Don’t meet our standards • Expensive to hire outsiders • 2 X first year salary

  20. Inside Availability Constraints • Johnson Controls success means our people are recruiting targets • Anticipated retirements for experienced senior leaders • Work / Life Balance

  21. Sales Tell Us Where We Need to Hire 2004 2010 Projected Asia13% Projected area of greatest global growth Asia 6% Europe31% Americas56% Europe39% Americas 55% Sales $26.5B $41.5B

  22. GROWTH GLOBAL Strategic Summary Develop more leaders • Our growth path means we need to develop more leaders • We have established our leader goal for 2010 • We are forecasting a need for 470 leaders to fill 350 positions Develop diverse leaders capable of handling increasingly complex jobs Commitment

  23. Blue Sky Leader Development Strategy DEVELOP BY DOING TAKE CHARGE SEEK SUPPORT

  24. DEVELOP BY DOING

  25. DEVELOP BY DOING “The illiterate of the future are not those who can’t read or write but those who cannot learn, unlearn and relearn.” - Alvin Toffler, author Future Shock

  26. In the past… • Globalization meant training Americans to be global thinkers Today • We recruit global leaders in the countries where we do business • 47 of top 120 are non US citizens • Senior leaders have expat experiences • 40 of top 120 senior leaders have been or are currently expats • We require all global leaders to travel and spend significant time around the world Global Leader Challenges DEVELOP BY DOING

  27. Global Leader Opportunities DEVELOP BY DOING Transfers…-between Groups and -between Groups and Corporate Benefits... -sharing best practices -first hand knowledge -energizes careers Results in... -more leader development and a stronger company Requires... -a new mindset

  28. TAKE CHARGE “Do what you can, with what you have, where you are.” Theodore Roosevelt

  29. SEEK SUPPORT • Feedback • Coaching and mentoring • Resources and training

  30. We All Need Support SEEK SUPPORT Of Top 120 at Johnson Controls • 66% in current job under 2 years • 33% have NO identified successor who is “ready now” • 78% have 5 to 35 years of experience

  31. Leader to Leader Exchange • Share / example • DEVELOP BY DOING • TAKE CHARGE • SEEK SUPPORT …that had a positive impact on you at Johnson Controls • Reciprocal and balanced • Begin with person with longest tenure

  32. Blue Sky Leader Development Strategy DEVELOP BY DOING TAKE CHARGE SEEK SUPPORT

  33. global enterprise-wide representation leaders capable of moving high potentials eXtreme Learning Program Talent Focus National Origin of Participants Total 37 US 20 UK 3 German 3 Singapore 1 Mexico 1 Spain 1 China 4 Czech Republic 1 Italy 2 France 1 Expatriates11 Job Changes to Date 14

  34. Global Leader Development Leaders with … • Greater knowledge of company • New skills and perspectives • Expanded network • Experience with a tough cross-company project Company with … • Development for senior high potentials • Increased knowledge of high potentials • Pool of ready now high potentials • Renewed commitment to leaders developing leaders

  35. Personal Assessment & Development • Solving Real Business Problems • Practical Leadership Skills • Business Knowledge & Exposure • Peer Networking • Team Building • Organization & Presentation of Ideas Key XLP Program Elements Manfred Rotterdam Interiors - Europe Jose-Miguel Lopez-Ascaso Battery - Europe Guy Holden Controls - Europe

  36. Developing a Model for Global Leadership How we built it What we found Research

  37. Project Goals • Clarify expected leadership behaviors • Identify the key success factors/behaviors that define outstanding performance • Use Johnson Controls wording to describe bothcurrent and future behavior requirements • Involve senior global leaders in the data collection process

  38. Interview Senior Leaders On-line Survey Senior Leaders Project Steps What do Johnson Controls best leaders do? The Johnson Controls profile Develop Johnson Controls Leader Expectations Model

  39. Research Findings Most Frequently Needed

  40. The Johnson Controls profile Interview Senior Leaders Develop Johnson Controls Leader Expectations Model GlobalLeader Profiles On-line Survey Senior Leaders Project Steps What do Johnson Controls best leaders do? What do other world-class leaders do?

  41. Research Findings Most Frequently Needed

  42. Research Findings Johnson Controls leaders value UNIQUE behaviors that are not observed frequently in other global companies Demonstrates Integrity “Doing the right thing” Shows Respect for Others Showing humility and treating others with dignity Drives Accountability Taking personal ownership and creating a discipline in others to do the same

  43. Research Findings Johnson Controls leaders value the following behaviors STRONGER than other global leaders Drive for Results Getting energized by the challenge and getting the job done personally Builds Teams Enlisting others in the quest for solutions Thinks Analytically Attacking problems and looking for ways to improve performance

  44. Research Findings Johnson Controls leaders value these leadership behaviors LESS FREQUENTLY than other global leaders Thinks Strategically Taking a long-term, multi-functional, multi-geographic perspective to business challenges Influences Others Influences Others without direct authority – demonstrating the ability to work across a global matrix Develops Employees Having a sense of urgency to develop bench strength and devote significant time and energy to mentoring/coaching others

  45. JCI Leaders Share Common Experiences • Stretch assignments • Mentors and role models • Trust in senior management

  46. Overall Themes Outstanding leadership • Demonstrates integrity • Shows respect • Drives accountability • Customer oriented

  47. Leadership Expectations Model A product of our current leaders

  48. Leader Expectations Model

  49. Demonstrates Integrity Susan Davis

  50. Drives Accountability John Barth

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