Creating Executive Commitment & a Culture of Health

1. Creating Executive Commitment & a Culture of Health Gary M. Billotti Leader, Health & Human Performance, The Dow Chemical Company HERO Forum for Employee Health Management Solutions September 18-20, 2006 Chicago

2. Remarks • Dow Background • Culture Concepts • The Dow Experience • Summary

3. The World’s Largest Chemical Company • Sales exceeding $40 billion • 165 manufacturing sites in 37 countries • Changing global demographics brings new challenges • China • India • Brazil • Russia • Middle East

4. More About Dow • Founded 1897 in Midland, Michigan • Strong Midwestern roots and values • 43,000 employees around the world (22,000 U.S.) • 54 percent of all employees are in manufacturing roles • Major U.S. locations in smaller communities • Ratio of male to female is 3 to 1 • Environmental Health & Safety vs. Human Resources

5. Dow Essential Elements • Mission - Why We're HereTo constantly improve what is essential to human progress by mastering science and technology. • Vision - What We Seek to BecomeTo be the largest, most profitable, most respected chemical company in the world. • Values - Who We AreIntegrity and Respect for People • Strategic Themes – How We Accomplish our Strategy Driving financial discipline and low cost to serve Setting the standard for sustainability. Building a people centric performance culture Investing in strategic growth

6. Organizational Culture Descriptions • The integrated pattern of human behavior that includes thought, speech, action and artifacts…. • The prevailing behavior patterns… and reflects what is acceptable or not acceptable, what is important or not important. • “How things get done around here” , Source: Joel Levey, PhD, Michelle Levey, MA, IHPM, 2001

7. Levers That Impact Individual Behaviors • Rewards/recognition • Communication • Structure of programs and services • Organization health culture • Individual beliefs and attitudes • Personal health status Source: Benefits Roundtable 2003 Health Behaviors Survey

8. Source: Benefits Roundtable 2003 Health Behaviors Survey

9. Organizational Health Culture • In addition to incentives, communications, and program design, the Roundtable’s 2003 Health Behaviors Survey tested the influence of different cultural elements on health-related behaviors. • The Roundtable’s analysis shows that some organizational health culture elements (such as caring about health and open communications) outpace other elements (such as visible senior management support and team-based work) in terms of participation influence. Source: Benefits Roundtable 2003 Health Behaviors Survey

10. Managing Complex Cultural Change

11. The Dow Experience • Design • Communication Strategy • Leadership Involvement • Programs and Services • Health Services Staff Culture • Vendors and Providers

12. The Dow Experience • Design • Business Case • Principles • Integrated comprehensive approach

13. The Business Case • Total Economic Impact related to Employee and Retiree Health likely exceeds $750 million/year for Dow. • Keeping US health care benefit costs in the lower end of the trend estimates could save Dow as much as $0.07/ share in 2008. • Many health care experts have estimated that a third of current benefits expenditures may be spent on unnecessary or inefficient care. • Most experts agree that 30 - 50% of health care conditions and illness could be modified by preventive health interventions. • Significant legislative and regulatory actions are developing and pending which will impact health care, particularly in the US.

14. The Dow Health Impact Opportunity The opportunity is to design and implement a Dow Health Strategy that supports an improved financial position relative to the economic impact from health AND creates a climate of support, engagement and satisfaction on the part of key stakeholders

15. Employee Medical (US) 14% Global Presenteeism 48% Retiree Medical (US) 19% Other Admin 13% Global Absenteeism 6% Total Economic Impact of Health

16. Dow Study: Overview Achieved 63% participation No $ Incentive • Research study • 12,000 employees • Three Survey Tools • Email / web based administration • Data merge with comprehensive extant data • Characterize presenteeism, functional status • Special focus on chronic illness

17. Guiding Principles • Employee advocacy • “Total Health” approach • Links to business strategies and priorities • Investment approach • Cross-functional • Priorities determined by impact on both direct and indirect costs • Data driven

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19. Health and Human Performance “Most companies have operated on the belief that high performance is exclusively linked with cognitive and intellectual capacity. Data and research have proven that for companies to achieve breakthrough growth and success, they must also focus on all of the elements of human performance – the body, the emotions, the spirit - consider the person as a whole.” Harvard Business Review: January 2001 Jim Loehr and Tony Schwartz

20. WellbeingandGrowth SeriousHealthProblems Development Fulfilment Depression Anxiety 1 2 3 4 5 6 7 8 9 10 PROGRESSIVELYWORSENING STATEOF HEALTH IMPROVING HEALTHAND WELLBEING HIGH QUALITY OF LIFEAND GOODPERFORMANCE AT WORK Advice and counselling Treatment Health promotion training: task assertiveness teambuilding life/work balance pressure management Work organization: job structure/content people resources performance reward development Occupational HealthDoctor, Nurse Counsellor External Agency Human Resources Occupational HealthManagers Senior Managers Line Managers Human Resources Is this a Health Issue or a Management Issue? Health Issues Management Issues Source Dr E Teasdale and Dr R Heron AstraZeneca

21. Dow Chemical Health & Human Performance EAP Human Resource Development Industrial Hygiene Group Health Benefits Health Promotion Safety Occupational Health Employment Accident Benefit Worklife/Diversity Organizational Effectiveness

22. Dow Health Strategy Vision We optimize health, human performance, and the long-term value for Dow by offering an array of health programs and services for employees, retirees, and dependents as part of being an employer of choice.

23. Vision Elements Advocacy c o m m u n i c a t i o n

24. Dow Health Strategy Metrics • Health Care Costs • Health-related Productivity (Absenteeism & Presenteeism) • Health Status / behaviors • Health Risks • Quality • Advocacy • Healthy Culture 1) My work environment enables me to maintain good health 2) Work-related stress does not interfere with doing my job well 3) Dow has a sincere interest in the health and well-being of employees 4) I am held accountable for doing my work in a manner that is safe// 5) People in my work area are protected from health and safety hazards. 6) The leader I report to enables flexible and innovative solutions for managing work and personal life

25. The Dow Experience • Design • Communication Strategy

26. Focus on shared responsibility and behavior Emphasize the benefits to the individual – both financial and health wise Integrate messages into existing communications and processes, i.e., expand safety culture to health and safety culture Recognize that health issues are very personal, therefore a heavy-handed approach will not be effective Sample objectives: Create a corporate culture that supports people being healthy Extend the “culture of health” to include families and retirees Communication Strategy

27. Health Strategy Communications Update Communication Strategy 2005-2006 Awareness Questioning Acceptance Sustaining • Unclear on scope, rationale, and nature of change • Unrealistic expectations • Rumor mill activity • Seeking information • Realization of the effort and complexity • Uncertainty and confusion • Fear of the unknown • Concern over personal impact • Recognition of personal benefits • Value to organization is understood • Comfort achieved • Willing to use technology • Change internalized • Supporting behaviors demonstrated • Improved performance Response Purpose Market & Sell Case for Change Solicit Input and Educate Encourage and Support Reinforce and Reward • Ensure that the compelling business reasons for change are clear to all employees • Set expectations and begin preparing people to change • Allow for two-way communications opportunities which allow for resistance and questioning • Clearly define change • Motivate people to let go of the old way of doing things • Influence people to try to accept the new way of doing things • Success stories • Reinforce the desired behavior in the changed organization • Promote the internalization of new behaviors to establish new culture • Encourage sustained acceptance and internalization of the new technology • Celebrate success Goals

28. Dow Health Message Map • Employee Health – Protection of health for workers, human performance optimization, financial performance • Public Health Impact – Product stewardship and community citizen responsibilities, financial, educational/ intellectual, physical/ security • Products for Health Impact – Meeting important societal human health needs

29. The Dow Experience • Design • Integration and development of principles • Communication Strategy • Leadership Involvement • Leading by Example • 2015 goals – Health Index • Get Fit with Bob • H H Dow Academy

30. Organizational Health Culture: Leaders While visible commitment from senior management is not as strong a driver of an individual’s participation in prevention, senior management does have a significant role to play in forging a corporate culture in which employees believe that the organization cares about their health and well-being. Benefits Roundtable of the Corporate Executive BoardJanuary 2004

31. Top Leadership Leading By Example, a CEO-to-CEO initiative sponsored by the Partnership for Prevention, focuses on the business priority of supporting health at the worksite.

32. A Strategic Approach to Building a Culture of Health “I believe we need a sustained focus on prevention to maintain and improve the health of our people. Prevention has the power to make a real and lasting difference in our individual quality of life... …Our analysis shows that prevention can improve both our direct and indirect health related costs. Our profit potential is inextricably linked to the capability and performance of our employees…. …We have recently strengthened our commitment to this effort by adopting a strategic approach to building a culture of health with prevention as a major pillar in our overall plan.” Andrew N. Liveris, President and CEO

33. 2015 Sustainability Goals Local Protection of Human Health and the Environment By 2015, Dow will achieve on average a 75 percent improvement of key indicators for EH&S operating excellence from 2005 baseline and community collaborative sustainable commitments. By year-end 2015: • Dow will achieve an injury and illness rate of 0.08 per 200,000 hours … • All sites combined will have fewer than 75 leaks, breaks and spills … • All sites will reduce process safety incidents and the severity rate … • Dow will reduce the motor vehicle accident (MVA) rate for all Dow EE’s .. • Target sites will have achieved site-specific goals addressing needs such as security, waste generation and emissions, maintaining and improving employee health, and resource conservation.

34. Get Fit with Bob! .... and get healthy “While we are all working to get Dow "fit" for the future, we have another opportunity -- to get "fit" for ourselves. I'm initiating a program for myself, and need some company. Our Health Services group tells me that 85% of employees at our Texas site are either overweight or obese. That tells me that some of you may want to join in. We need to make some progress and I want to invite you as a leader to help get us started. Some of us need to lose, others need to maintain. Let's do this right. The plan is outlined below . . .” June 2005

35. HH Dow Academy • "Dow must offer an extensive leadership development strategy to nurture talent for corporate-critical roles, we need to start building our next generation of top leaders today, and we need to equip them with what it takes to successfully meet complex future challenges." • The program is designed to enhance participant's strategic and global leadership skills through action learning. • Top Leaders at Dow (V3 and above) • “Energy for Performance” Executive Course – Human Performance Institute

36. The Dow Experience • Design • Integration and development of principles • Communication Strategy • Leadership Involvement • Leading by Example • Programs and Services

37. Communication: E-health • Good Health for the Whole Self • Global • Brand – builds trust through consistency • Intranet site and Internet– web-based self service • www.dowfamilyhealth.com • Coordinated with Benefits

38. Drive Patience/Impatience Control Personal Influence Problem Focus Social Support Emotional Detachment Stress Management: Measurement Domains Sources Individual Differences Effects Job Satisfaction Organisational Satisfaction Organisational Security Organisational Commitment State of Mind Resilience Confidence Level Physical Symptoms Energy Levels Workload Relationships Recognition Organisational Climate Personal Responsibility Managerial Role Home/Work Balance Daily Hassles Sources ofPressure IndividualDifferences Effects

39. History – Corporate Smoking Policy U.S. Policy – First U.S. policy implemented in 1993 • Owned by Human Resources • Supported by Health Services Current U.S. Policy - Implemented January 1, 2003 • All Dow property and meetings are smoke free.

40. Case Management Overview Program Objectives • Rapid return to health and return to work • Effective and efficient use of services • Highly satisfied participants and Dow Management Key Program Features • Global Operating Discipline from broad engagement (HR, EAP, Worker’s comp, employees, supervisors…) • Voluntary • Health Advocacy Model • Early Identification, Triage and Action • Site Pilot (Midland Operations) 2000-2002 • A Six Sigma project used to create the “model” program

41. Health Surveillance • 90% participation in 2004 globally • 95% of employees responded that health assessment is a valuable service provided by Dow • Built from the existing safety culture • Includes counseling referral & follow up

42. Overweight & Obesity Study Partner with the National Heart Lung and Blood Institute, Cornell University, Medstat, and the University of Georgia . . . • Study Purpose: Design, implementation and evaluation of innovative and evidence basedapproaches to organizational/supportive environment interventions aimed at reducing the prevalence of obesity and overweight among Dow • Twelve sites participating • Evaluation documentation of interventions that impact overweight and obesity at the workplace .

43. Interventions • Employees have access to healthy food choices • Access to physical activity • Site health goal (in alignment with Site MI Plan) • Work group alignment to the site health goal • Tracking and reporting (to Gary Veurink) of site and work group goal activities • Leadership learning/training • Site leadership and cross-discipline team recognition

44. The Dow Experience • Design • Integration and development of principles • Communication Strategy • Leadership Involvement • Leading by Example • Programs and Services • Health Services Staff Culture • Vendors and Providers

45. Health Services Staff Culture • Global Integration • Prevention Focus • Focal Point Roles • Performance tied to health improvements • Cross functional involvement • Professional Development

46. The Dow Experience • Design • Integration and development of principles • Communication Strategy • Leadership Involvement • Leading by Example • Programs and Services • Health Services Staff Culture • Vendors and Providers

47. DOW RESTRICTED - For internal use only

48. Vendor or Partner ? ven-dor 1: one that vends: seller part-ner 1: one who shares: one or two or more persons who play together in a game against the opposing side: one of the heavy timbers that strengthen a ship’s deck to support the mast.

49. Dow Health Partner SummitPurpose and Objectives Purpose: • To convene key Dow health-related service providers for an intensive review of Dow's Health and Human Performance efforts, and to determine how each provider plays a role both independently and interdependently in helping Dow achieve its objectives. This effort will enable a more efficient and effective approach to providing services to enhance the health of the Dow community.

50. Summary • Business Case provides the platform • Effective Communication is critical • Integration across functions and with “partners” • Alignment with Business Priorities • Champions at all levels • All strategy and implementation approaches impact organizational culture whether intentionally or unintentionally.