Culture Steering Group on Culture Step-change

1. Culture Steering Groupon Culture Step-change 15th Feb 2016

2. Culture is a critical success factor for growth We are addressing the tangible aspects of our organisation: Model, Products, Structure, Cost, Data We know we need to address the intangible as well Purpose, Vision, Values, Behaviours Ambition and belief Cultureeatsstrategy forbreakfast… …andtechnology forlunch, andproducts fordinner. Peter Drucker, Consulltant and author Bill Aulett, MD Martin Trust centre for Entrepreneurship @ MIT Sloan • Have we described the problem/opportunity correctly? • Are we focused on the right actions – and what else?

3. Creating a Step-Change in our Culture Culture diagnostic • What's the situation and desired outcome? Gap analysis • What's the opportunity? Change levers, dials and outcomes • how do we close the gap? Actions • What's the plan? Implementation - making it happen • Our culture needs to support and enable the hard organisational transformation • We propose a brave, simple, fast and focused culture improvement programme • Rapid, meaningful changes to our culture that supports transformation and return to growth Jan Feb Mar - Validate, test, engage, improve, measure, refine, communicate, share As we implement rapid change, we will use the learning to create a more complete definition of our culture and programme of sustainable cultural improvement

4. Strawman: Moving to a culture that enables our growth

5. Short-term outcomes that drive growth Brave, accountable leaders Sharp focus Belief in our future Performance with purpose Simple, swift execution

6. Proposed priority actions

7. Image by Lucy Vigrass 2016 Leadership Development Approach 12 February 2016 LD_Culture_SteerCo_v1.0_120216 ‹#› 2016 Leadership Development Strategy

8. Leaders enable our strategy Strategy Culture Objective Leadership Get back to growth. We’ve identified what shift our leaders need to make & how we’re going to help them make that shift. Now, we need them to buy into why it’s important. Our 2016 company goals. We’ve identified what needs to change in our culture – and our leaders are at the heart of this. 2016 Leadership Development Approach

9. Pearson’s leadership shift • To get back to growth, we need to change our culture. To change our culture, we need our leaders to make a shift. To make this shift with impact and speed, our leaders will need to want to do it, work as a joined-up team, and hold each other to account. Belief in our future Performance with purpose Brave, accountable leaders Simple, swift execution Sharp focus • Articulate our business strategy & how it links to education with clarity & energy. • Build confidence that we can achieve our goals. • Celebrate successes, empower employees & bring positive energy. • Understand our core operations & what drives performance. • Deepen our understanding of the players in the market: colleagues; customers; influencers; learners; shareholders. • Ensure employees understand our products, especially those which will drive growth. • Develop an understanding of the relationship between financial performance & learner outcomes. • Lead change with compassion. • Create resilience & positive energy. • Act as a role model to employees through their behaviour. • Make brave decisions & execute them without exceptions. • Continually encourage simpler, faster & less wasteful ways of working through smarter processes, technology & less hierarchical decision-making. • Manage performance. • Set clear expectations & goals • Create a culture of clear, shared goals & continuous measurement. • Quickly reorganise the company to focus on key opportunities & shut down distractions. Brave, Decent Imaginative Accountable, Decent Accountable Brave, Accountable 2016 Leadership Development Approach

10. How we’ll make the shift Our learning approach is: • Made up of four streams of activity that are designed to deliver culture change and performance on real business priorities more quickly. The streams aren’t delivered at the same time but are mutually-reinforcing. • Theory-light, with a focus on application and accountability. • Lead by Senior Leaders, and enabled by HR and thoughtfully-selected external facilitators. How Our Learning Approach Stream 1: Viral Change • Facilitated workshop with 15 global influencers to kick-start cultural change. Stream 2: PEM Team Effectiveness • Facilitated workshop to create a safe space for learning and listening, build better relationships and more effective ways of working. Stream 3: High-impact Team Coaching • Frequent, informal coaching support for teams working on real business priorities to deliver performance more quickly. Stream 4: Formal & Collaborative Learning • Frequent bursts of learning content centred on real business priorities, delivered by Senior Leaders. Leaders possess the knowledge, mindset and ability to lead their business and people through the turnaround, work as a joined-up leadership team, and deliver our 2016 company goals more quickly. Outcome 2016 Leadership Development Approach

11. Stream 1 – Viral Change Stream 2 – PEM Team Effectiveness Audience: PEM Outcome(s): • Identify dominant leadership style and effect on climate. • Adapt leadership style to lead cultural change. • Provide each other with feedback on behaviours and ways of working. Metrics: Participant feedback; Employee Survey; assessments. Audience: SLG-level ‘Influencers’ Outcome(s): • Identify behaviours needed to lead cultural change, and apply them. Metrics: Employee Survey; leadership communications; participant feedback. Identify 15 influencers from SLG. Brief influencers on current state culture & PEM on how to support them. Facilitate workshop to identify & agree on behaviours needed to lead cultural change. Influencers commit to individual & collective action & share with rest of SLG / organisation. PEM completes Hay Group Styles & Climate assessments. Facilitator debriefs results & facilitates action-planning workshop with PEM. PEM commits to individual & collective action. One-to-one follow-ups with Exec Coaches, as required. Stream 4 – Formal & Collaborative Learning Stream 3 – High-impact Team Coaching Audience: Selected VP & Above Outcome(s): • Apply the actions from Stream 1 to expedite performance on three business priorities. Metrics: Employee Survey; participant feedback; progress against plan. Audience: VP & Above Outcome(s): • Create a leadership community that is curious, eager to learn and open to sharing in a safe space. • Develop an external perspective on market trends. Metrics: Participant feedback; uptake; leadership communications; Employee Survey. Build Learning Faculty comprising SLG members with specific areas of expertise. Learning Faculty delivers sessions aligned to learning needs every six weeks. Provide VP & above with access to self-directed, online learning (e.g. Harvard LeadingEdge). Learning Faculty shares relevant content to VP & above. Identify three business priorities & a PEM sponsor for each. Identify cross-functional, working groups assigned to work on each priority. Tap into groups’ existing working rhythms & provide coaching support. Group commits to individual & collective action & reports progress to PEM sponsor. *Recommendation to facilitate workshops face-to-face.

12. Culture is a critical success factor for growth Have we described the culture problem/ opportunity correctly? Are we focused on the right actions? • Leadership development (and is the solution the right one?) • Communication, leadership, strategy • Goals and performance What else is an immediate action area?