HR SummitOct. 17-18, 2011

Why Employee Engagement Matters in Kodak’s Diversity & Inclusion

Worldwide Strategy

Augustin MelendezChief Diversity & Community Affairs Officer

Vice PresidentEastman Kodak Company

Today’s topics:

Kodak – Our Journey of Innovation and Change Management experience

Transformation as an Enabler of Diversity

Employee Engagement’s role in Diversity & Inclusion in our global organization

Your Questions and Answers

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Transformation

1880-2002: Kodak is the world’s leader in imaging (sensitized materials: films, paper, cameras, graphics products)

2003: Kodak begins “seminal transformation” from film/chemistry business to digital imaging and printing- four-year business transformation

At the core: 10,000+ patents: digital imaging, nanotechnology, inkjet, electrophotography, microprinting, thin-film technologies

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Kodak People

1980s: Kodak had 120,000 employees globally, 60,000 in U.S.

Today: ~18,000 employees globally, ~8,000 in U.S.

Non-U.S.Employees

49%

U.S.Employees

51%

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1st Digital Camera

Digital Imaging

Revolutionary InkjetAffordable Ink

A Look at Kodak’s Milestones

Color! Easy-loadingDocument Management

Imaging

X-ray Printing AffordabilityRoll Film

Photography

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About 45 million pictures are captured daily with Kodak digital cameras or film.

Kodak products touch about 40% of the world's commercially printed pages.

More than 100,000 Kodak kiosk order stations are in stores worldwide.

KODAK Gallery has 75 million members;

manages more than five billion images.

Over the history of the Academy Awards, the majority of Oscar-winning movies have been made on Kodak film.

Today: Unleashing the Power of Intelligent Imaging

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Our Portfolio: 2010 Revenue = $7.2 Billion

Consumer Digital

Film, Photofinishing & Entertainment

Inkjet Systems

Digital Capture and Accessories

Retail Systems Solutions

Kodak Gallery

Entertainment Imaging

Traditional Photofinishing

Industrial Materials

Film Capture

Graphic Communications

Digital Printing SolutionsInkjet Printing Solutions

Electrophotographic Printing Solutions

Prepress SolutionsOffset Solutions

Packaging Solutions

Business Solutionsand Services

Document ImagingUnified Workflow SolutionsKodak Services for Business

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Our Strategy

Large markets in need of transformation offer great growth opportunities for Kodak

Higher margins are driven by expanding consumables and services

Our strength comes from our unmatched combination of IP, deposition processes, image quality, and brand relevance

Leverage our competitive advantage at the intersection of materials science and digital imaging science

A Profitable and Sustainable Digital Company

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Enterprise Branded

Goods

EnterpriseMarketing Spend

SmallBusinessMarkets

Consumer Printing and Self-Publishing

Enterprise IT

Packaging$237B

Commercial$290B

Publishing$155B

Printing & Document Mgmt

$75B

Consumer Digital Imaging$280B

Our Opportunity: Large Markets

Consumer & Commercial

graphics products & integrated solutions

~$110B(addressed market)

Extending into new addressable markets and increasing market share

Publishing$155B

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Employee Engagement at KodakThe Context of Employee Engagement

SAY

Speak positively about the organization to co-workers,

Potential employees and customers

STAY

Have an intense desire to be a member of the organization

STRIVE

Exert extra effort and bededicated to doing the very best job possible

to contribute to the organization’s business success

Creating an intense desire for employees to actively take part in the successful ventures of an organization.

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Engagement Matters

Actively Engaged employees work with passion and feel a

profound connection to their company. They drive innovation,

move the organization forward and ultimately improve company

performance.

Non-Engaged employees are essentially ‘checked out’.They’re on auto-pilot, going through the motions through their

workday, putting time – but not energy or passion – into their work.

Actively Disengaged employees aren’t just unhappy at work;

they’re busy acting out their unhappiness. Every day, theseworkers’ attitudes undermine what their engaged coworkers

accomplish.

Source: http://gmj.gallup.comFrom: MYKodak – Engaged, Non-Engaged Toolkit

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How leaders can engage employees’ heads, hearts, and hands: The Ten C’s of Employee Engagement 1. Connect: show that employees are valued

2. Career: provide challenging and meaningful work

3. Clarity: communicate a clear vision

4. Convey: clarify expectations and provide feedback

5. Congratulate: give recognition

6. Contribute: help people see and feel how they are contributing

7. Control: create opportunities for employees to exercise control

8. Collaborate: be a team builder; create an environment that fosters trust and collaboration

9. Credibility: demonstrate high ethical standards

10. Confidence: be an exemplar of high ethical and performance standards

Source: http://www.thepracticeofleadership.net 12

What’s missing?

CULTURE

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Global Diversity… the degree and depth of richness represented by the populations of people along multiple dimensions supporting Kodak, and

Global Inclusion… the effective engaging and leveraging those individuals to impact the business.

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Our Values

Recognition and celebration

Integrity

Trust

Credibility

Continuous improvement and personal renewal

Respect for the dignity of the individual

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-3-547-2118

Cultural Variables

1. Environmentcontrol/harmony/

constraints2. Time

Single- focus/ multi -focusfixed/fluid

past/present/future

3. Actionbeing/doing

4. Communicationhigh/low

direct/indirectexpressive/instrumental

formal/informal

5. Spaceprivate/public

6. Powerhierarchy/ equality

7. Individualizationindividualism/collectivism

universalism/ particularism

8. Competitivenesscompetitive/cooperative

9. Structureorder/flexibility

10. Thinkingdeductive/inductivelinear/systematic

Source: Brake & Walker,Doing Business Internationally

Cultural Orientations

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How do we define diversity and inclusion?

Diversity: acknowledging, understanding, accepting, valuing, and celebrating differences among people with respect to age, class, ethnicity, gender, physical and mental ability, race, sexual orientation, and spiritual practice.

Everyone counts!

Inclusion: An inclusive environment in which we leverage diversity to achieve company business objectives and maximize the potential of individuals and the organization.

If we do this right, we: Fully engage energies of Kodak's

employees Meet competitive challenges in the

marketplace

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“When we gather people with diverse backgrounds,we invite different viewpoints and ideas. This triggers creativity, innovation and growth – all essential for Kodak’s success in the 21st century.”

-- Kodak CEO Antonio M. Perez

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• Sets the tone and expectation for Excellence• Models diversity and inclusion from top to bottom• Effective Leadership critical during lean economic times

How we get there: Starts and Ends with Leadership

Antonio’s Four Strategic Corporate Policy Priorities: Grow Digital Growth Initiatives Positive Cash Generation Before Restructuring Customer Centricity Employee Engagement, Diversity and Inclusion

Global D&I Priorities

Inclusive Work Environment

Growth & Innovation

MyKodak Survey;

Employee Touch Points

Globally Inclusive Culture/Workplace

Diverse Markets

Knowledge & Skill

Development for Global Inclusion

Global population

reflects appropriate

Demographics

Inclusive Marketplace

Customer Satisfaction

Market-shareROI

Best Talent; Engaged

Workforce

High Performance

Achieving ACP;Training Metrics

Cross-cultural Workforce

Diverse Workforce

reflects Marketplace

Diverse hiring;Retention;

Representation

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D&I Outcome:Business Outcome: Metrics

1. Managing diversity for a global organization:10,000-foot view

Inclusion and diversity strategy aren’t always translated globally. Different regions have different needs.

We need the best thinking, insights that a diverse workforce provides.

We need to understand, recognize and respect the perspectives and customs of our customers and partners throughout the world.

As we grow in global markets, we all are accountable for treating each other – our customers, our business allies, and our community partners – with dignity, fairness, and respect.

Managing diversity is more than acknowledging differences in people. We also must recognize the value of theirdifferences, combat discrimination, and promote inclusiveness.

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2. Managing diversity: 1,000-foot view

As Kodak changed and grew smaller, refined our Global Diversity & Inclusion focus to reflect the company’s changes – but kept focus on inclusion and engagement.

Developed global inclusion strategy, messaging and training tools that are integrated with HR engagement structure.

Global Diversity & Inclusion Council – 2011

Jean Lewis - regional APR global inclusion  manager based in Mumbai, India

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Asia-Pacific Region (APR) Council

Study of External Research Available

Compilation of APR Demographics

Formation of APR Council

Administer an APR Employee Survey

Employee Communications

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Discussion with GDIC and APR Leaders6

Engage Strategy & Tactics (2012)7

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Asia-Pacific Region (APR) Employee Survey

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Purpose: Identify our strengths and challenges with respect to Inclusion and Engagement. Design future activities for enhancing our Inclusion and Engagement efforts in APR

Design: 16 Questions based on 3 areas: Diversity, Inclusion and Employee Engagement Languages: English, Chinese, Japanese, Korean

Respondent Size 40% employees across all divisions in APR based on random sampling

Data Collection/Analysis Response through on-line anonymous survey/statistical evaluation tools

Results:

65% Response Rate

Organizationally Inclusiv

e Culture

Knowledge & Skill

Development

Global Employ

ee Demographics

ACT 2011 – Senior Leader Diversity & Inclusion Accountability/Scorecard

Leadership commitments - few key focus areas

Workplace: • Build inclusion & engagement

globally Marketplace:• BU/Region Diverse Markets • Supplier Diversity

• U.S. Supervisory inclusion training

• Global Supervisory inclusion and engagement training

• Non-U.S. Women Executives • Global Women GOLD Pipeline• WOC Initiative (U.S.)• U.S. Exempt Job

Groups

Confidential 24

3. Managing diversity: At the front line

Diversity & Inclusion Governance Structure

APRCouncil (pilot)

EAMERCouncil

Global Diversity & Inclusion CouncilBU/Regional /Functional Representation

Co-Chair, Gustavo Oviedo / Co-Chair, Augustin Melendez

AmericasCouncil

United Kingdom Germany Russia Poland Dubai

ChinaIndiaJapanSE Asia ANZKorea

BrazilMexicoCanadaUnited States

New

New: Jean LewisAPR D&I Mgr

Executive CouncilChair, Antonio Perez

New

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More diversity & inclusion outreach

Community Affairs – engaging more Kodak people in working with diverse constituencies; external relations

Women of Color initiative – identifying and sponsoring high-potential women of color (globally) to help develop skills, acumen to become our next generation leaders

Executive engagement – CEO meets with each diverse constituency to discuss ways they can become engaged in the company’s renaissance.

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Employee Networks & Engagement

My Kodak Survey

Top Management is taking the right actions to successfully transform Kodak.

My work is important to the direction this company is taking

Kodak is winning with its customers with great new products and services

My work environment promotes enthusiasm

I am proud to say I work for Kodak

I have had an opportunity to participate in a discussion of last quarter’s MyKodak Survey results.

I have had a chance to hear about the company’s strategy from a leader(s) in my organization.

I understand the company's strategy.

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HR Survey

Goals for diversity, inclusion, and engagement

Diversity & Inclusion is a journey, not a destination. So the destination keeps moving!

Aspire to an environment and enterprise where we allRespect the diversity of others.Bring integrity to everything we do.Be trustworthy. Never stop learning. Celebrate achievements of others Give back to others. Create opportunities for those who follow.

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Summary / Key Learnings:

Kodak’s Journey of Innovation and Change

Diversity Focus a Key Enabler of our Transformation

Employee Engagement role in Shaping our Diversity & Inclusion Strategy Globally.

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Questions and Answers

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