1

BILL McDANIEL 1510 Litina Dr., Suite A Alamo, CA 94507 925.765.2786 billmcdan@gmail.com

Transformational Leadership Translates into High Client Satisfaction

What was done … q  Merger integration q  Supplier rationalization q  IT strategy

§  Plant maintenance & equipment reliability q  Business strategy q  Organizational development q  Best practices

q  Business transformation strategy and execution

q  Supplier rationalization and supply chain reengineering §  MRO procurement §  Logistics/transportation

q  Strategic partnership selection and launch

q  Transform business model and operating model §  Strategy change from operational

excellence to customer intimacy §  Organization development, reengineering

and launch, best practices

q  Turnaround of a reengineering effort that initially failed to meet targets

q  Supplier rationalization and reengineering §  Contract services §  MRO procurement

q  Strategic partnership selection and launch q  Organization development

q  Strategic partnership selection and launch q  Plant maintenance planning and execution

What was achieved … ü  $50MM annual savings, plus identified

$50MM of additional annual opportunities ü  Reduced purchase price by 15% - 20% ü  Developed strategy to automate workflow

management systems in 14 mfg. plants ü  Implemented strategy review process

utilizing balanced scorecards

ü  $30MM annual savings, plus $35MM one-time gain

ü  Integrated process reengineering plan with company-wide SAP installation

ü  $36MM annual savings ü  50% inventory reduction ü  Implemented balanced scorecard and

management processes to sustain improvements

ü  Increased sales by 40% ü  Developed strategic partnerships with

Ingram Micro and Buy.Com ü  Became industry leader in on-line leasing

technology

ü  $4MM annual savings to meet original targets

ü  $23MM annual savings realized from outsourcing telecommunications

ü  $12MM annual savings ü  Reduced purchase price by 12%-18% ü  Reduced procurement administration ü  70% inventory reduction ü  Slashed overhead costs significantly by

reducing number of suppliers

ü  $35MM annual savings ü  75% improvement in maintenance

productivity ü  50% inventory reduction

Bill has over 30 years experience leading large-scale change efforts as a consultant and senior executive. Bill has experience as a Fortune 500 senior executive with Chief Procurement Officer, Chief Information Officer and Chief Financial Officer responsibility leading change efforts in procurement, information technology, supply chain, business operations and finance.

LinkedIn Profile: http://www.linkedin.com/in/williamemcdaniel

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BILL McDANIEL 1510 Litina Dr., Suite A Alamo, CA 94507 925.765.2786 billmcdan@gmail.com

What was done … q  Thought leadership with Dr. Michael Hammer

author of four international best sellers on business transformation and reengineering. Dr. Hammer was named by Time Magazine as one of America’s twenty-five most influential individuals §  Team leadership, cat herding skills, vision

q  Transformed a product driven company to become customer focused §  Strategy, governance, reengineering,

organizational development §  Business Architecture §  Best practices §  Focus groups

What was achieved … ü  Led a consortium of leading companies (e.g.,

AAA, IBM, Cantrell & Assoc, Inc., Michelin, Schneider National) to develop a process maturity assessment framework, which was published in the Harvard Business Review (April, 2007)

ü  Led a team of companies (e.g., AAA, Dupont, EPCOR, IBM, Merck, Michelin, Shell, United Illuminating) to develop a common framework for enterprise governing processes.

ü  Co-led team of companies to dramatically improve development, deployment, and renewal of process metrics

ü  Developed a transformational business model and operating model to improve pre-tax earnings by $85MM annually

ü  Developed a Distribution Strategy to shift from face-to-face customer servicing to contact center & internet servicing. $45MM improvement to pre-tax earnings with significant improvement to customer retention

ü  Reengineered IT Division and relocated to another state saving $20MM annually

ü  Improved executive decision making by reducing from 15 governing bodies to 2

Selected Clients (and employers) … §  United Illuminating (Vice President Admin. Executive Sponsor) §  El Paso Corporation, EVP Administration and Business Unit President executive sponsors §  MacMillan Bloedel, COO executive sponsor §  Conoco-Phillips Petroleum (Formerly Tosco Corporation), President and Chairman executive sponsors §  Weyerhaeuser, Chief Procurement Officer executive sponsor §  ARCO, Business Unit President executive sponsor § Southern Natural Gas, President executive sponsor §  AAA, President, SVP, COO, VP, and Directors as executive sponsors §  Japan Leasing of America, Inc., President and COO executive sponsor Education … §  Bill is an alumnus of the Stanford University Graduate School of Business, University of Iowa Graduate School of Business, and Central College of Iowa (Honors Cum Laude and received the National Wall Street Student Achievement Award)

Transformational Leadership Translates into High Client Satisfaction

3

BILL McDANIEL 1510 Litina Dr., Suite A Alamo, CA 94507 925.765.2786 billmcdan@gmail.com

Recommendations

Carl Hensman, Ph.D. Principal, Research Scientist and Owner , Frontier Geosciences Inc. “Bill came into a extremely challenging, convoluted, emotional environment and through patience, training and encouragement, changed the fundamental way that the company did business for the better. My current style of management uses nearly every tool and technique that Bill taught me. Everyone needs to spend time with Bill.” Mike Garzone Procurement Executive, The United Illuminating Company “I would highly recommend Bill who brings deep procurement knowledge to help identify process improvements, set a path to best practice and deliver desired results. He works well with all levels of management or staff, and was successful in leading cross functional teams to implement corrective action. Bill is able to quickly get to core issues, and you can have confidence that he will lead your teams to desired results in effective and efficient manner. These projects can be difficult in many ways, Bill was dedicated, persevering and made it fun.” Greg Tucker SVP Business Transformation, Copart

“Bill is a master of Process Improvement and Transformation and has delivered significant and measureable results from dozens of process improvement efforts. He has done an outstanding job of building an organization of skilled and motivated consultants that are routinely called upon by Senior Management to lead the most complex change efforts. He has led the introduction of GE's Work-Out and CAP (Change Acceleration Process) to the organization to drive faster and more committed change in partnership with business leaders. Bill has also led the thought leadership of many Process Management topics in partnership with the late Dr. Michael Hammer. He is a great leader of change, a well respected people manager and innovative colleague at pushing the envelope of process thinking. I fully recommend Bill and look forward to the next time we get to work together.”   Martha Batorski President & CEO, Batorski Stephens & Associates, Inc. I teamed with Bill McDaniel and Dr. Michael Hammer to develop the Process and Enterprise Maturity Model (PEMM). The resulting work was subsequently published in the Harvard Business Review in 2007. Bill's abilities are both impressive and unique. Impressive because Bill possesses, -- as an innovator in designing and implementing best practices -- a demonstrated history of successes in operationalizing proven approaches in organizations . Unique because Bill also possesses extraordinary abilities in the skill of visual sensemaking -- the art of simplifying the complex. This ability has allowed Bill to directly impact the enhancement of messages needed to move minds in organizational change, thereby impacting the speed of adoption. Few executives I have ever met possess these much needed skills. Dorothea Brennan Director Process Improvement, The Illuminating Company “I worked with Bill over a number of years on process related projects for the Phoenix Research group of Hammer and Company. I found Bill to be an extraordinary facilitator. Our groups consisted of a wide diversity of companies, backgrounds and skills. Often Bill was facilitating virtual meetings. I marveled at his skill in making sure everyone was heard and in summarizing the material to keep the group focused and on track. Bill would follow-up with PowerPoint slides that were excellent. We were working on complex conceptual information and Bill was able to provide visual materials that made it easy to convey the team's work product to the broader membership.

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BILL McDANIEL 1510 Litina Dr., Suite A Alamo, CA 94507 925.765.2786 billmcdan@gmail.com

Tool Kit

Certifications …. §  Process Mastery from Hammer and Co. §  Helix Plan Facilitation Methodology §  Master Black Belt from GE in Change Acceleration Process (CAP) §  Master Black Belt from GE in Workout™ §  Total Quality Mgmt (TQM) from Dr. Joseph Jurand §  Rummler-Brache Methodline Process Improvement §  GE Facilitative Leadership Techniques §  Six Sigma §  Lean

3Business Process Excellence

Process Performance Planned

DefineProcess

Performance

DevelopProcessMetrics

DeployProcess Metrics

1. Select a Critical Process2. Profile the Process3. Identify Potential Metrics

4. Select Dashboard Metrics5. Define Dashboard Metrics6. Create Dashboard

8. Set Targets9. Identify Metrics Owner10. Implement Metrics Collection

M1

M2

Units Goal MilestoneCalc. Freq.Metric 1Metric 2Metric 3

1

3

2

The Process Metrics Roadmap

02 13 2004

COMMENTSHOMEOWNERS IN CRITICAL DUE TO SEVERAL LARGE LOSSES PAID, AND REDUCED FREQUENCY OF LOWER LEVEL LOSSES

DATA DICTIONARY

YTD BY WEEK

YTD BY WEEK

YTD BY MONTH

AS OF DATE

AS OF DATE

YTD BY WEEK

3B  U  S  I  N  E  S  S      P  R  O  C  E  S  S      E  X  C  E  L  L  E  N  C  E

SERVICE  SEEKERSERVICE  SEEKER NO  FACE  TO  FACENO  FACE  TO  FACE SKEPTICSSKEPTICS

DELIVER  CUSTOMER  SOLUTIONS

Product  Offerings

DEVELOP  AND  MANAGE  CUSTOMER  SOLUTIONS

CUSTOMER  SEGMENTS

DELIVER  MARKET  SOLUTIONS

ACQUIRE  AND  SERVICE  CUSTOMERS

ACQUIRE  AND  SERVICE  CUSTOMERS

UNDERSTAND  LOCAL  MARKET  AND  SET  LOCAL  STRATEGY

UNDERSTAND  LOCAL  MARKET  AND  SET  LOCAL  STRATEGY

ADMINISTER  MARKET  OPERATIONS

ADMINISTER  MARKET  OPERATIONS

BUILD  &    DEVELOP  CUSTOMER  SOLUTIONSBUILD  &    DEVELOP  

CUSTOMER  SOLUTIONSSUPPORT  CUSTOMER  

CHANNELSSUPPORT  CUSTOMER  

CHANNELS

MANAGE  RISK  /  COMPLIANCE

MANAGE  RISK  /  COMPLIANCE

MANAGE  CLAIMS  SUPPORT  FUNCTIONS

MANAGE  CLAIMS  SUPPORT  FUNCTIONS

PROVIDE  MGMT  INFO  AND  ANALYTICS

PROVIDE  MGMT  INFO  AND  ANALYTICS

SERVICE  POLICY  AND  PROCESS  CLAIMS

SERVICE  POLICY  AND  PROCESS  CLAIMS

PROVIDE  DIRECT  SALES  CAPABILITIES

PROVIDE  DIRECT  SALES  CAPABILITIES

SLAs

PROVIDE  THIRD  PARTY  PRODUCTS

PROVIDE  THIRD  PARTY  PRODUCTS

PROVIDE  THIRD  PARTY  SERVICES

PROVIDE  THIRD  PARTY  SERVICES

SUPPLEMENT  CUSTOMER  SOLUTIONS

OTHEROTHER

Manage  Vendor  Relationships

Manage  Vendor  Relationships

Create  and  Manage  Marketing/Advertising

Create  and  Manage  Marketing/Advertising

Manage  Accounts  Receivable  and  Accounts  

Payable    

Manage  Accounts  Receivable  and  Accounts  

Payable    

Manage  Document  Fulfilment  and  RecordsManage  Document  

Fulfilment  and  Records

ENABLING  PROCESSES

Manage  P&P,  IT,  Corporate  Legal

Manage  P&P,  IT,  Corporate  Legal

Develop  StrategyDevelop  Strategy

Translate  Strategy  into  Op  ObjectivesTranslate  Strategy  into  Op  Objectives

Allocate  ResourcesAllocate  Resources

Manage  ExecutionManage  Execution

Est.  Decision  Making  FrameworkEst.  Decision  

Making  FrameworkManage  Risk

Manage  Risk

Lead  Strategic  Change

Lead  Strategic  Change

GOVERN

ANCE  PRO

CESS

ES

Customized  Service  by  Segments

Tailored  Marketing  Campaigns

Captive,  Independent,  AAA  Partner  Agent  Mix  

Customized  Service  by  Segments

B2B  Service  Package  Offering

Standardized  Products

Marketing  Campaigns

Insurance Operating Model – Process View

4

BUSINESS PROCESS EXCELLENCE ? 8 ?

Insurance ExamplesInsurance Examples

Insurance Examples

A company must aim to excel in a specific value discipline whilemaintaining threshold standards in the other two

Operational Excellence“Best Total Cost”

Customer Intimacy“Best Total Solution”

Product Leadership“Best Product”

Customer responsive

Product differentiation

Operational competence

Threshold Standard

• “Best product, period” • Focus on offering products or services that expand existing performance and innovation boundaries

• Market Leaders include 3M, Microsoft, Nike, Google, Apple

• “We take care of you and your needs,” “We get you the best total solution”

• Focus on building bonds with customers and delivering what a specific customer wants

• Market Leaders include Nordstrom, Home Depot, USAA

• “Guaranteed low price and/or hassle-free service” • Focus on delivering quality, price, and ease of purchase that no one else in their market can match

• Market Leaders include Wal-Mart, Southwest, McDonald’s

Source: Treacy, Michael. The Discipline of Market Leaders. Perseus Publishing, 1997

USAAState Farm ACSC

Amica ACG Erie

Geico

Travelers

Allstate Safeco

Progressive

Esurance

OPERATIONAL EXCELLENCE and TRANSFORMATION ? 1 ?

Launch Process Ownership 90 Day Project Goals

MANAGEMENT SYSTEMS

PROCESS

CULT

URE

DISTRIBUTION

ORG

ANIZATION TE

CHNO

LOGY

Career/ Succession

PathsCompensation

& Benefits

Performance Management

Real Estate Model

Retail & Channel Design

Channel Integration &

Migration

Applications

Infrastructure

Data Information

Process Designs

Process Owners

Process Metrics

Desired Cultural

Behaviors

Cultural Rules

Decision Empowerment

Models

Corporate Expansion

Model

Organization Structure/

Design

Competencies, Roles &

Skills

Culture: > Determine readiness for

change and develop plan> Continue and improve

communication> Shift all IT employee

communication focus from awareness to engagement

Organization: > Complete assignment of

employees into process based organization

> Define sub-process owner role

> Name sub-process owners

Process: > Map all processes to level 2> Refine sub-process definitions

(MECE) and link to the process model

> Identify quick hits> Complete deep-dive for the project

management sub-process

Vision & Values

Target Market &

Value Proposition

Strategic Discipline

Products Pricing

Branding Marketing

Process Owners: > Develop process training for

Process Owners and all employees

Keep the “Ship on Course” and …..

Process Metrics: > Develop high level

metrics for core processes

This seems really

aggressive ….Do we

have the right time

commitment and

required resources ?

1. Is this a

separate sub-

team? 2. What

will we learn

from Hammer

next week?

24

Criteria APC Intel Boeing IBM TetraPak Hilti QR

1 Governance Processes

2 Enabling Processes

3 Core Processes

4 Enterprise End-to-End Processes 5 Sub-processes

6 Financial

7 Non-financial

8 Leading

9 Lagging

10 Long Cycle

11 Surrogate

12 Customer Focused

13 Metrics Linked to Enterprise Strategy

14 Culture Transformation

15 Balanced Scorecard in Place

Metrics: A Catalog of Case Studies Presented at Hammer and Company The Forum + Clinic Series on Metrics 2005 to 2007

= Definitely = To a large extent = To some extent = Only slightly = Not at all, or unknown

Queensland Rail

2005 2006 2007