The World is Flat

“Globalisation? It means primarily creation of horizontal networks and increasing role of co-operation and mutual trust …“
Thomas L. Friedman – The World is Flat A Brief History of the Twenty-First Century

Good Food, Good Life

Change in the Mindset

FROM Hierarchy Command Experience Competing Discipline National - Functional

TO Network Alignment Insight Co-operation Initiative Cross-border/Cross-functional

TASK ORIENTATION
Good Food, Good Life

RESULT ORIENTATION

The Develop People Initiative
Core elements:
1. Holding an effective performance and development dialogue in an agreed performance and career management process Applying 13 behaviours from the Nestlé Leadership Framework Planning succession

2. 3.

Good Food, Good Life

Management development Scope & working principles     Competency based recruitment Definition of Key positions at local / regional / Group levels Succession planning for Key positions with target of 2 successors per position Performance assessment using competency based: .360o Feedback .Progress & Development Guide (appraisal form) . Good Life .Training and development  Expansion of Talent pool based on new definitions Good Food.

business turnover. Good Food. business complexity and potential for growth.Key position KEY POSITION: … defined as business critical for a long-term sustainability of the group. … using criteria such as market size. Good Life .

Good Life M D an ev a el g e op m m en en t t So ur ci ng .Management development Sourcing Management Development & Sourcing Internal sourcing & People development for Key positions Good Food.

Good Life . and ‘how’ they do it • Move away from ratings to the language of performance • Salary increases based on 5 criteria:.Develop People – different from current performance management systems FROM • No consistency across markets • Seldom applied to top management • The focus was on ‘what’ people achieved • Performance and Competencies were rated in an inconsistent way • Salary increases generally based on performance TO • One consistency standard across the world • Starts with and is led by top management • The focus is on ‘what’ people achieve. market forces. potential. fairness and salary history Good Food.performance.

Cascading objectives(O). strategies(S) & measures(M) O S M Company O S M O Division S M O Department S M Individual/Team Action Plan The company strategy becomes the divisional objective and the divisional strategy becomes the department objectives and so on Good Food. Good Life .

Nestlé Leadership framework Progress & Development Guide Nestlé Leadership Framework Inspiring People Flat and Flexible Flat and Flexible Structures Structures Inspiring Inspiring Management Management Long-term Long-term Development Development Dynamic Dynamic Compensation Compensation Life-long Learning Life-long Learning • Lead people • Develop people • Practise what you preach Adding Value Opening Up • Know yourself • Insight •Progress and Development Guide Service Orientation Name: Current position: Review Period: • Results focus • Initiative • Innovation & Renovation Dealing with others • Proactive co-operationDevelopment Part 2: Career & Developed Improvement needs Objectives: • Curiosity Date of last review: Leadership Framework • Courage Part 1: Achievements Leadership Framework DEALING WITH OTHERS Strengths • Convincing others Key Areas to be Plan Action plan (what.) Results: OPENING UP Know Part 1:Yourself Achievements Insight Proactive Cooperation Annual Business Objectives Impact / Convince Others Part 2: Career & Development Reviewer’s Comments Plan Nature of the Contribution Transforms Steers Possible Options for Action plan Personal / Career Development (if applicable) Service Orientation Long Term Development Objectives INSPIRING PEOPLE Lead People Employee Comments Develop People Practice what you Preach Curiosity Courage KNOWLEDGE 1 Name of employee Signature Name of reviewer Signature 5 Masters Acquires ADDING VALUE Results Focus Initiative Product Knowledge Professional Knowledge & Skills Trails 3 4 Innovation & Renovation Good Food. by when. Good Life 2 .. training .. by whom.

Good Life .Using the Nestlé Leadership Framework • • • Behavioural Competencies – behaviours provide the point of difference between a good performer and an average one The Nestlé Leadership Framework provides direction on the behaviours that matter at Nestlé They apply to everyone in the business What is a competency ? Any characteristic of a person that differentiates levels of performance Demonstrably Related to Superior Performance in a Job Characteristic that Enables Superior Performance : •more often •in more situations Good Food.

Individual behavioral competencies Skill Knowledge Social Role Self-Image Trait Motive Behaviours Good Food. Good Life .

Achievement.. Motives are natural and constant thoughts and preferences in a particular area (i.e. basic accounting principles. being a good listener. Affiliation.g.g. e.. seeing oneself as a teacher or leader. Traits are relatively enduring and stable characteristics of a person’s behavior. reading a profit-and-loss statement.Individual competencies (cont’d) The Competency Foundation Characteristics at different levels: Skill Knowledge Social Role Self-Image Trait Motive Skills are the things a person knows how to do well. Good Food.g. and Power) that drive..g..the internal concept of identity. Self-image is the way a person sees him/herself .what one believes is important to do .such as developing others or providing a sense of mission & direction. e. e. or being able to recognize patterns across seemingly unrelated elements. direct. It reflects a person’s values . Social Role is the image a person projects to others. Knowledge is what a person knows about a particular substantive area. e.. and select a person’s outward behavior. Good Life .

Negotiating Low Job Complexity High Good Food. Labor Relations. Companies Products. Skill in active listening. Good Life .Behaviors become more important as job complexity increases « Natural » Tendencies and Traits Relative Importance For Example: Results Focus Curiosity Proactive cooperation Courage Task-Related Knowledge and Skills For Example: Knowledge of Electronics. Law.

Nestlé Leadership Framework 4 clusters and 13 behavioral competencies Inspiring People • Lead people • Develop people • Practise what you preach Adding Value Opening Up • Know yourself • Insight • Service Orientation • Curiosity • Courage • Results focus • Initiative • Innovation & Renovation Dealing with others • Proactive co-operation • Convincing others Good Food. Good Life .

It is shown in the efforts a person will make to understand the customer's expectations and needs. by asking probing questions. ideas and situations that have no obvious connection with one another and to assemble them in a meaningful way. distributor. understand their implications on your effectiveness in the organization and take them into account to optimize performance. consumer etc…). “Customer” can be any person or organization for whom the service is intended (internal client. CURIOSITY Curiosity means people are open minded to learn more about the environment. It allows them to take decisions. or make choices. INSIGHT Insight is the capacity to identify links between facts. things and people.Nestlé Leadership Framework OPENING UP KNOW YOURSELF Knowing yourself is the ability to accurately identify and understand your own strengths and improvement areas. COURAGE Courage is linked to people’s confidence in their capabilities and judgment. to provide them with high quality service for a long-lasting and mutually profitable relationship. SERVICE ORIENTATION Service Orientation is the desire to help and serve one’s customers in a way that best meets their actual needs. insight manifests itself as the creation of new ideas or the development of a long term vision. or doing ad hoc research to gain a better understanding of the context. Good Food. At a highly developed level. at the same time evaluating the risks and being conscious of their responsibilities. Good Life . colleagues at all levels.

People with initiative not only react to situations but also anticipate future opportunities or problems. and act upon them well in advance. INITIATIVE Initiative makes people act in a proactive way by taking action and not simply thinking about the future. and come up with new ideas to operate more efficiently. deliver business results and continually find sustainable improvements in methods and processes. At a highly developed level. they act as change catalysts for the whole organization.Nestlé Leadership Framework ADDING VALUE RESULTS FOCUS The drive to meet or exceed ambitious performance objectives and quality standards. INNOVATION / RENOVATION People exhibiting this behavior challenge the status quo in a drive for improvement. Good Life . Good Food.

IMPACT & CONVINCE OTHERS Convincing others. either directly or using appropriate third parties. Good Life . It may involve the sacrifice of individual objectives with a view to achieving the group objectives. understanding the needs and goals of others and adapting one's own views and behavior when appropriate. in order to get their commitment to ideas. projects or actions that are in the Company’s interest.DEALING WITH OTHERS Nestlé Leadership Framework PROACTIVE COOPERATION Proactive cooperation implies working collaboratively with others. Good Food. demonstrating commitment to achieve group objectives.

Good Life . Good Food. including “Walking the talk” even when it is difficult to do so. so they push their limits and are encouraged to outperform.Nestlé Leadership Framework INSPIRING PEOPLE LEAD PEOPLE Leading people is the ability to unite individuals. encouraging their individual learning by providing them with appropriate support. DEVELOP PEOPLE Developing people means helping individuals identify their short and long-term development needs. make them believe in themselves and in what they are doing. It implies actively demonstrating the behaviors that are consistent with Nestlé Management and Leadership Principles. PRACTISE WHAT YOU PREACH Practise what you preach means acting consistently with and embodying the Nestlé Principles and Values.

Good Life .When should you do an Interim Review?  At least once through the year to ensure the reviewee is on track  When the reviewee's objectives change significantly  When the reviewee changes positions  When the manager changes position  In these last two situations the full end of year process should be completed including giving an overall assessment  This information should be provided to the reviewee's new manager Good Food.

Coaching @ Feedback are ongoing and occur at each stage of the Cycle. market forces. fairness and salary history.Performance Review Cycle Business Objectives Set Personal Performance Objectives* Development Plan Identify Behaviors Final Review Salary Review Review Progress • • • The performance review is one of the inputs into salary review. Good Life . Good Food. The other criteria for salary increase – if any – are: potential.

Objectives need to be be Specific but Stretching. drilled down from the Company's short and long term goals and measuring achievement through the WHAT-demonstrated results and the HOW .demonstrated behaviors. Agreed. Aligned and Achievable. It contains 2 dialogues one on performance and one on development. This dialogue also includes a discussion about which of the Leadership behaviors are important for success. Leadership Behaviours in Action Behaviors in the Leadership Framework are actively discussed in all work situations as a way of improving individual and company performance. Measurable.Develop People Best Practices Performance Management It is a continuous process between Reviewing Manager and Reviewee defining and agreeing on business and personal objectives. Realistic and Time bound is SMART and need to include 2 to 3 development objectives which are longer term objectives to be achieved over 1-3 years. It is necessary to behave in accordance with the Nestlé Leadership & Management Principles Setting Personal Objectives to Business Objectives Is an agreement between Reviewing Manager and Reviewee of the objectives proposed by the Reviewee to meet the company's business objectives. Develop People Page 1 of 2 . Use of the leadership behaviors is essential for Nestlé on the Move Reviewing Employee Performance It is holding a performance dialogue between the Reviewing Manager and Reviewee focusing on the results achieved from the agreed objectives using observed behavior and facts to agree achievement.

Planning Succession This is the process by which successors are designated for positions within the organization in order to ensure business continuity and excellence. as well as identify any area where qualified successors do not exist. Self Guided and Manager Supported Development Development is defined as proactive responsibility for learning about myself in my work so that I can stretch myself to perform even better. Giving and Receiving Feedback This is a discussion between the Reviewing Manager and Reviewee on their performance or behavior and how it affected their outputs. This process enables management to gain sound knowledge of the future requirements of the organization and plan for leadership talent. Holding a Development Dialogue A discussion between Reviewing Manager and Reviewee which focuses on how the individual can address performance through expanding knowledge or skills. In most cases the employee is responsible for carrying out the agreed development and the manager is responsible for championing the process.Develop People Best Practices Career and Personal Development It is a continuous and joint process for identifying and developing employee competencies and potential to ensure that future performance is aligned with business evolution.It is a recognition that only I can manage my own learning but my manager/team can support me with the right kind of challenge and encouragement. Where possible feedback refers to the behaviors of the Leadership Framework. Develop People Page 2 of 2 .

Good Life .Training and Learning  Change of training culture (focus on training on the job)  Emphasize the role of manager  Use of new Nestle Leadership Framework & Nestle on the Move concept  Skills courses transfer to the competency based models  Course nominations based on results of appraisal meeting – PDG forms  New e-learning programme  E-learning & Blended solution Good Food.

For key people 2 successors are nominated  Succession nominations & career plan based on results of appraisal meeting – PDG forms Good Food. Good Life .For each position are defined key competencies .Career Development / Planning  Change of career development and succession planning culture  Emphasize the role of manager  Use of new Nestle Leadership Framework & Nestle on the Move concept  Profile assessment based on the competency model: .

successors. …) expats / inpats remuneration interdepartmental discussion on HR issues Good Food. Good Life . …) high potential (development. successors.Career Committee Career Committee:  Mini-career Committee = HR Partners + Division Head  Company CC = HR Partners + Managers Committee  It is about: headcount organisational structure key people (development.

Nestlé on the Move – Year 1 Appraisal meetings. setting Appraisal meetings. setting objectives. performance evaluation objectives. setting objectives. Good Life . performance evaluation performance evaluation Start-up regular Start-up regular process process Good Food. Appraisal meetings. performance evaluation Train all appraisers Train all appraisers and appraisees and appraisees Train the Train the managers managers Start-up Start-up Results / /evaluation Results evaluation Feedback to managers Feedback to managers Career committee Career committee and training plan 2005 and training plan 2005 1112/2003 01 02 03 04 05 06 07 08 09 10 11 Train new Train new appraisers and appraisers and appraisees appraisees 12 01/200 5 Appraisal meetings. setting objectives.

Nestlé on the Move – Year N+ Appraisal meetings. setting objectives. setting objectives. Appraisal meetings. performance evaluation performance evaluation Train factory Train factory appraisers and appraisers and appraisees appraisees Results / /evaluation Results evaluation Training nomination Training nomination Train all new Train all new appraisers and appraisers and appraisees appraisees 1112/2004 01 02 Mini-career Mini-career committees committees 0 3 04 05 06 07 08 09 10 11 12 Mini-career Mini-career committees committees Career committee Career committee Career committee Career committee 01/200 6 Good Food. Good Life .

SBU/Functions March 21 to 29: April.Oct Plans and Actions to fill gaps June .Aug Succession Planning March Talent Pool proposal by evaluation of potential March 14 to 18: Pre-calibration Talent Pool discussions . Expatriates and High Potential March 11th: Verified Talent Pool list is due back to the Zone September EBM validation Succession Plans for Corporate Key Positions and ManCom Positions July to 30th August: Zone Validation of the Succession Plan Final list transmitted to the markets after EBM Validation Sept .February In green: Zone Inputs In black: EBM Inputs Feb.Management Development Cycle In red: Market Inputs Mid . Good Life Development and Succession Planning discussions SBU/ Function .23th:HR Zone EUR deliver current Talent Pool and Management Development Nov.May Talent Pool Validation Zone Validation of the Talent Pool submissions Final list transmitted to the markets after EBM Validation April12th EBM Talent Pool Validation May 21st: Submission of the June 1st to June 29th: Management Management Development and Succession Planning proposals by the markets for Key Positions Good Food.Feb Progress & Development review (incl. review of delivery on objectives) P& DG for Key Positions.

Personal Development Cycle P&DG Training & Development Plan Career & Succession Plan Objective setting (short/long term) Good Food. Good Life .

Personal Development Cycle – 4 steps End of February: Nov-Jan Run PDG (incl. achievement of objectives) September: Applications for Rive Reine programs completed March Consolidate individual training & development plan April Prepare regional training & development plan End of March: Individual training & development consolidated by CE HR • PDG finalized by Markets and forwarded to CE HR • Personal objectives defined May-Oct Run training & actions to close development gaps Mid of April: Training plan developed for Region End of April: Plans approved by CdD Good Food. Good Life .

Succession Planning Cycle – 4 steps End of February: PDG finalized by Markets and forwarded to CE HR Nov-Feb Run PDG (incl. achievement of objectives) March June-Oct Plans & actions to fill gaps April-May Propose succession plan End of March: Succession plan proposals logged into database by Markets and CE Management End of April: Succession plan reviewed through and finalized by CE Director and CE HR May: Approved succession plan June: CE Succession planning completed and sent to HQ Vevey Succession planning discussions between • CM – CE • CE – LOC Good Food. Good Life .

Training & Personal Development Cycle End of February: PDG finalized by Markets and forwarded to CE HR March-April Collect and assess needs vs existing opportunities October T&D budget established through CM + CE HR + CE Finance June-Oct Plans & actions to fill gaps Nov-Feb Run PDG (incl. achievement of objectives) End of April Training and development needs consolidated and comparison to existing training * opportunities completed May Develop individual Training & development plan June Individual training & development plan approved by CM + CE HR Existing Training • Country local: CM. local HR • Nestlé centralized/decentralized: CE HR • Rive-Reine: CE HR • E-learning tools: CE HR Good Food. Good Life .

Confirmed by SBU/Funtions//Global Business 5. Confirmed by EBM Good Food. Resources Group High Po Group Resources Parties involved 1.Zone Assistants SBU-Function Head / Corporate MD/Zone Management 6. Proposed by Market / Business 2. Good Life .Proposal and validation process Group Assets Line Manager Market Talent Pool Market High Po Market Resources Zone / Bus. Validation/ Confirmation . High Po Zone / Bus. Proposed by SBU/Functions/Zone or Global Business 4. Confirmed by Market / Business Line Managers/ MANCOM Local HR Validated 3.Zone Management Validated Confirmed Validated MBO/Functions / HR .

Good Life .Q & A Questions & Answers Thank you! Good Food.