ECOLAB’S TALENT PIPELINE: DEVELOPING GREAT LEADERS FROM WITHIN BEST PRACTICES INSTITUTE

1. ECOLAB’S TALENT PIPELINE: DEVELOPING GREAT LEADERS FROM WITHIN BEST PRACTICES INSTITUTE AUGUST 6, 2009

2. ECOLAB, INC. • Global leader in cleaning, sanitizing, food safety, and infection control products and services. • Serves customers in 160 countries. • 26,000 employees. • 2008 sales revenue of $6.1 billion.

3. Q: HOW FAMILIAR ARE YOU WITH THE LEADERSHIP PIPELINE MODEL? • Very familiar • Somewhat familiar • Vaguely familiar • Not at all familiar

4. THE ‘LEADERSHIP PIPELINE’ • Described by Charan, Drotter, and Noel in 2001 • Based on the natural hierarchy of work in most organizations. • Each leadership level in an organization calls for new skills and a different focus to execute more complex responsibilities. • Movement up the hierarchy requires transition through a series of critical leadership passages made possible by the development of the skills required at the next level.

5. BUSINESS CONTEXT Committed to 15% annual growth for 5 years in 2003 – Ecolab would double its size by 2007 requiring… • Capturing greater share in current markets. • Entering new market segments. • Developing a broader range of cleaning and sanitizing products and services. • Significantly expanded efforts and operations globally. Lack of available leadership talent was viewed as a primary constraint.

6. ECOLAB’S CULTURE • Strong sales culture – 60% of Ecolab employees in sales or sales/service roles • 5 business “drivers”… • Talent Development. Preparing associates for current and future success. • Leadership. Creating a vision, engaging others, and leading by example. • Relationships. Identifying and building networks to advance business initiatives. • Innovation. Fostering an environment that drives creativity and risk-taking. • Delivering Results. Achieving goals by effectively managing resources to get things done.

7. LINK TO ECOLAB’S CULTURE

8. THE ECOLAB TALENT PIPELINE Distinct Roles Unique Skills and Work Priorities Targeted Development

9. THE ECOLAB TALENT PIPELINE

10. SUCCESS INDICATORS AT EACH LEVEL

11. SUCCESS FACTORS BY BUSINESS DRIVER Leadership

12. KEY PASSAGES IN THE TALENT PIPELINE Managing Self to Managing Others Managing Others to Managing Managers Managing Managers to Function Manager Function Manager to Business Manager

13. EXAMPLES In 2008… • 2000 new hires in the US • 250 hiring and promotional decisions at the “managing managers” level (180 promotions, 70 outside hires) • Doubled the number of General Manager roles since 2003 • 80 hiring and promotional decisions at the executive level (30 outside hires, 50 promotions)

14. FOCUS ON DEVELOPMENT Compare Results Assess Capabilities Development Planning/IDP

15. KEY SUPPORT SYSTEMS & PROCESSES

16. ECOLAB’S HIGH POTENTIAL MODEL

17. RESULTS • 265% increase over 2001 sales revenue. • Talent Pipeline fully implemented worldwide. • Top two tiers of executive-level leaders are fully in place. • Pool of ready-now general manager candidates has increased three-fold. • Identified and developed record numbers of high potential leaders who are ready to assume greater leadership responsibilities. • Record number of developmental job rotations and cross-divisional moves. • All associates regularly complete the 180° assessment; discuss development with their manager; and have created practical and realistic development plans.

18. LESSONS LEARNED • Link to business need and strategy • Consistent and active top management engagement • Clear, understandable framework – widely communicated • Cannot ignore the organizational culture • Idea is simple, implementation is complex; defining competencies (by level) is hard • Accessible, practical tools and support for development • Need for variety of supporting systems and processes • Ongoing focus – process never ends

19. Contact Information Mike Meyer: Mike.Meyer@ecolab.com Sue Metcalf: Sue.Metcalf@ecolab.com Bob Barnett: bbarnett@mdaleadership.com