Designing the Organization Structure & Governance Model

Gwen Callas-MillerTextron

Sue ToddCorpu

April 30, 2009

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Strengthen Leadership

Bench

• Attract the best talent in the industry

• Achieve top quartile retention of key people

• Improve overall employee engagement & loyalty

• Become a great place to work

Achieve L&D Excellence

Become Employer of

Choice

Drive Business Impact

• Align learning with key business priorities

• Organize L&D to support continuous business change

• Execute learning program design and delivery efficiently

• Measure the impact of learning

• Speed throughput of leadership pipeline

• Improve HiPo identification & development

• Meet changing generational needs

• Engage leaders as teachers

• Ensure manager-led development

• Develop strong succession plans

Human Capital Challenges

• Support top line growth

• Reduce cost

• Increase profit per employee

• Accelerate success of mergers & acquisitions

• Support global growth

• Improve performance management

4

Three Basic Models

Varied Organizing Models

Characteristics of L&D Organizing Decisions

Centralized Decentralized Federated

STRENGTHS Strong control over all aspects of L&D, and central integration points to HR processes

Empowers BU L&D teams who are in a good position to understand the needs of the customer

Balances freedom with control among the central team and separate BU L&D organizations

Decision-making concentrated in the hands of a single group

Allows freedom and ownership among training groups

Fosters a strategic longer-term approach through agreements between operating units

Provides a single voice to ensure consistent messages across the enterprise

Provides quick response to immediate needs of line managers

Addresses redundancy issues without diminishing BU’s ability to focus on local needs

Eliminates redundancy Programs are perceived as being more relevant to the needs of the workforce

Creates opportunity to appreciate diverse approaches, and standardize the best ones

Easier to develop brand and strengthen reputation of a single identity

Early Centralized Model

Strengthening Connections to the Business

Centralized Decentralized Federated

WEAKNESSES Eliminates diversity across programs that can provide insights on the “Voice of the Customer”

Fosters fragmentation and duplication of effort

Consensus decision-making can delay action

Programs and services may not adequately serve the unique needs of the business units

Difficult to create common skills and approaches across the organization

Some L&D teams may opt out of agreed programs

Can lead to weaker relationships with business unit managers

Often not strategic due to focus on daily challenges

Tough to redistribute budgets to address changing enterprise objectives

Programs may have a “corporate” flavor

Potential to put local priorities above corporate objectives

Central team can be viewed as being reactive

Centralized Decentralized Federated

STRENGTHS Strong control over all aspects of L&D, and central integration points to HR processes

Empowers BU L&D teams who are in a good position to understand the needs of the customer

Balances freedom with control among the central team and separate BU L&D organizations

Decision-making concentrated in the hands of a single group

Allows freedom and ownership among training groups

Fosters a strategic longer-term approach through agreements between operating units

Provides a single voice to ensure consistent messages across the enterprise

Provides quick response to immediate needs of line managers

Addresses redundancy issues without diminishing BU’s ability to focus on local needs

Eliminates redundancy Programs are perceived as being more relevant to the needs of the workforce

Creates opportunity to appreciate diverse approaches, and standardize the best ones

Easier to develop brand and strengthen reputation of a single identity

Decentralized Structure

Centralized Decentralized Federated

WEAKNESSES Eliminates diversity across programs that can provide insights on the “Voice of the Customer”

Fosters fragmentation and duplication of effort

Consensus decision-making can delay action

Programs and services may not adequately serve the unique needs of the business units

Difficult to create common skills and approaches across the organization

Some L&D teams may opt out of agreed programs

Can lead to weaker relationships with business unit managers

Often not strategic due to focus on daily challenges

Tough to redistribute budgets to address changing enterprise objectives

Programs may have a “corporate” flavor

Potential to put local priorities above corporate objectives

Central team can be viewed as being reactive

Centralized Decentralized Federated

STRENGTHS Strong control over all aspects of L&D, and central integration points to HR processes

Empowers BU L&D teams who are in a good position to understand the needs of the customer

Balances freedom with control among the central team and separate BU L&D organizations

Decision-making concentrated in the hands of a single group

Allows freedom and ownership among training groups

Fosters a strategic longer-term approach through agreements between operating units

Provides a single voice to ensure consistent messages across the enterprise

Provides quick response to immediate needs of line managers

Addresses redundancy issues without diminishing BU’s ability to focus on local needs

Eliminates redundancy Programs are perceived as being more relevant to the needs of the workforce

Creates opportunity to appreciate diverse approaches, and standardize the best ones

Easier to develop brand and strengthen reputation of a single identity

Federated Structure

Centralized Decentralized Federated

WEAKNESSES Eliminates diversity across programs that can provide insights on the “Voice of the Customer”

Fosters fragmentation and duplication of effort

Consensus decision-making can delay action

Programs and services may not adequately serve the unique needs of the business units

Difficult to create common skills and approaches across the organization

Some L&D teams may opt out of agreed programs

Can lead to weaker relationships with business unit managers

Often not strategic due to focus on daily challenges

Tough to redistribute budgets to address changing enterprise objectives

Programs may have a “corporate” flavor

Potential to put local priorities above corporate objectives

Central team can be viewed as being reactive

17

Centralization Decentralization

Centralizing Knowledge

Decentralizing Activity

Cen

tral

izin

g

Activity

Tug and Pull of Centralization Vs. Decentralization

Impr

ovem

ent o

f K

now

ledg

e

Improvement of Activity

Source: Trompenaars, Fons. “21 Leaders of the 21st Century”. 2001

Company Confidential Company Confidential 18

L&D as Business Partner:A Model for Governance and

Execution within a Large Organization

April 30, 2009Gwen Callas-Miller

Exec. Dir., Global Leadership Development

19

Quick Facts About Textron• Headquartered In Providence, RI• Approximately 38,000 Employees in 29

Countries• Manufacturing Operations in 20 Countries• 2009 Fortune 500 Ranking: 173• NYSE: TXT

20

Textron Systems

2008 Textron Inc. Revenue: $14.25 Billion

Bell HelicopterCessna Aircraft

Cessna

40%

Bell

20%

TextronSystems15%

Leading Branded Businesses

E-Z-GOGreenleeJacobsenKautex

Industrial

20%

Textron Financial

Finance

5%

Note: Percentages reflect portion of 2008 Revenues

21

Transforming Textron –Our Ongoing Journey to Premier

A Simpler, More Focused Portfolio of Leading, Branded Businesses in Attractive Industries

NETWORKED ENTERPRISE

EnterpriseManagement

How We Manage What We Own

PortfolioManagement

WhatWe Own

VISION:To be the premier multi-industry company, recognized for our network of powerful brands, world-class enterprise processes and talented people

22

Results of Transformation

• Decentralized, holding company

• Businesses insulated • Redundant

activities, spend• Limited sharing of

talent• Decentralized

learning model

Pre-2001 Today• Networked organization• Common processes • Horizontal councils for

functions• Enterprise-wide values,

development• Federated learning model

23

Talent Development as Key Element of Transformation

• Continuum of development resources across businesses - “Haves” and “Have Nots”

• Top level succession focus• Two executive development

learning programs

Pre-2001 Today• Enterprise COE for talent:

• Learning (Textron Univ.)• Performance Management• Vertical /Horizontal Succession• Career Development• Engagement• Change Management

• Businesses responsible for unique needs

• Tight collaboration with BUs through governance structure

24

• Level the playing field for high quality, consistent and cost effective learning

• Focus on enterprise learning strategy linked to business and needed across the company – leadership, functional excellence and business skills

• Viewed by CEO, Leadership team as an enabler to developing talent and providing a mechanism to bring leaders together to drive desired culture

Textron University’s Role in Transformation

25

Governance Structure & FlowsTransformationLeadership Team

Textron UniversityAdvisory Group

Textron UniversityLead Executive

HR LeadershipCouncil

Talent DevelopmentAdvisory GroupBU L&D

Textron Councils Functional Requirements

Performance Solutions ManagersLeadership & Functional Requirements

Textron UnivSupport TeamDesign & Execution

Textron University Team

ExternalBenchmarkSources

26

Role of L&D Advisory Group• Serves as “voice of the customer” on annual

strategic learning plan• Functions as extended TU team by

participating in program design, supplier assessment, executing communications and getting local consensus on priorities

• Collaborative partnership – for the most part• Members value:

– Opportunity to shape learning beyond their BU boundaries, and

– Share best practices across businesses

27

Textron University Advisory Group

TUAG Chair Chief HR Officer,& Management Comm.

Dep. Managing Dir.Global Tech CenterIndia

VP HRCessna

EVP, Chief CounselTextron Financial Company

EVP Strategy, Textron

Exec. Dir.Global LeadershipDevelopment, Textron

*

EVP Government,International &Management Comm.

EVP OperationsBell Helicopter

Asst. ControllerTextron

Textron’s Transformation Leadership Team (Management Committee & all Business Unit CEOs)

Industrial SegmentPresident

Senior Team of Top BU and Function Executives

28

Role of the Governing Board• Ensures strategic objectives are aligned with

enterprise objectives • Serves as a decision making body, accountable

to make choices on priorities and investment• Evaluates ongoing performance and value of

Textron University to the enterprise• Members serve as champions – demonstrate

executive commitment to learning as a strategic enabler

• Making a commitment to deliver measurable business results

5 Key Dimensions of Governance Accountability

• Driving out costs and pursuing optimal efficiency

Operational Effectiveness

• Establishing and enforcing quality standards

Program and Service Quality

• Accounting for and controlling expenses across the enterprise

Effective Controls

• Maintaining site of corporate objectives in relation to local needs

Adherence to Enterprise Priorities

1.

2.

3.

4.

5.

Marks of Good Learning Governance

Governance Mechanisms

Financial

PortfolioPeople

OperationsPrograms

Technology Integration

Service Usage Fees

Program Funding Model

Programs

Facilities and Technologies

Infrastructure Funding LearningServices

Roles & Responsibilities

Program Oversight

Shared Services

Process Owners

Rationalization Process

Shared Artifacts

Strategic Planning Process

Enforce Standards

Enforce Policies

Learning Platform

Exception Policy

Requirements Definitions

Talent Processes

Performance Processes

Work Force Utilization

DRIVEN BY EXECUTIVES

Information

Data Standards

Reporting Policy

Data Admin Controls

Decisions, Policies, Processes

Centralized Model With Governance

33

Managing Partner(Elected to 2-year term)

Governance for Decentralized Model

34

Advisory Board

Group Leader

Curriculum Designer

CurriculumDesigner

Curriculum Designer

Curriculum Designer

Curriculum Designer

Curriculum Designer

Curriculum Designer

Mining Diamonds Finance Asset Mgmt

Shipping Procurmnt HR Leadership Marketing Community Relations

HSE Exploration Project Mangmnt

Continuous Improvmnt

Principal AdvisorLearning Core Team

Executive Committee

Advisory Board

Training Curriculum Sponsors

Regional Capabilities

Performance Consulting LMS Administration Solution Sourcing Vendor Management Training Delivery

Logistics Localization

NameNameNameNameNameNameNameName Name Name Name Name Name Name

Business Unit Training

Operational Site Specific Training CertificationHSE

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Advisory Board

Governance for Federated Structure

Company Confidential 35

L&D as Business Partner:A Model for Governance and

Execution within a Large Organization

April 30, 2009Gwen Callas-Miller

Exec. Dir., Global Leadership Development

Company Confidential

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36

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