Member Exchange June 23, 2017

Red Wing History

The Factory

Where It All Began

• Since 1905

• Red Wing, MN

• Charles Beckman

• Farming, logging, mining

• World War I, World War II

• Privately-held

• Sweasy family since 1920’s

• Bill Sweasy, Jr.

4

Today

• 2,300 employees worldwide

• Sell in 110 countries

• 700 + Red Wing Shoe Stores / trucks worldwide

• 2 domestic factories

• 3 international factories

• 2 tanneries

• 5 distribution centers worldwide

• And 1 Hotel!

Purpose

Our reason for being is…..

We will be a great company

that makes a difference in people’s lives.

Purpose

Vision

Our aspirations are…..

We aspire to be a premier footwear, workwear, and retail company that

delivers remarkable products, services, and experiences worldwide.

Vision

Guiding Principles

The beliefs and behaviors that guide us…..

• Live our values of respect, integrity, community, and excellence

Our Values

• Honor and nurture our brands

Our Brands

• Inspire and empower our people

Our People

• Be customer and consumer centered

Our Customers

• Preserve the long term success and legacy of our Company

Our Shareholders

Our Brands

10

Heritage

Strategic Direction

Our integrated roadmap…..

• Evolve our people and culture (into a highly engaged workforce)

• Profit from the core (for efficient and affordable sustaining growth)

• Lean into adjacencies (with new investment for future growth)

• Drive to a sustaining financial model (return on net assets)

Profit from the Core

The choices that we’ve made…..

• Work, Fashion, Outdoor, Hunt, Tanning

Businesses

• Red Wing, WORX, Irish Setter, Vasque, S.B. Foot

Brands

• Footwear, Workwear, Accessories, Leather

Products

• Red Wing Stores, e-Commerce, Direct to Business, Wholesale

Distribution

• Worldwide

Geography

Profit from the Core

• Profitably grow our existing portfolio of businesses

• Deliver remarkable products, services, and experiences

• Improve execution, insights, and scalability

• Lever our vertical integration

Lean into Adjacencies

• Evolve the Work business into an integrated provider of safety solutions worldwide

• Significantly grow the Heritage business by expanding existing footprints in North America, Europe, and Asia

• Lever our Omnichannel capabilities worldwide, in balance with key business objectives

• Develop and deliver value-add services and experiences that connect and enhance our businesses worldwide

Drive to a Sustaining Financial Model

• Focus on being great (the numbers will follow)

• Drive profitable growth (for greater reinvestment)

• Lever our assets (key metric is Return On Net Assets)

People & Culture

#1 Strategic Priority

Talent Challenges/Trends

Attracting and retaining critical talent

Aging workforce, loss of institutional knowledge, widening skills gap

Continued emergence of new worker types

Focus on continuous learning, career growth & redefining performance

Increasing expectations of the “employee experience”

Diminishing importance of functional structures & rising importance of “networks” of teams

Increasing global complexity

Evolve our People & Culture

• Drive organizational alignment, improve collaboration & inspire our people

Embrace strong, cross-functional leadership

• Attract & retain top talent, embrace diversity & inclusion, and promote continuous learning

Unleash our people and capabilities

• Invest in organizational well-being & deliver a remarkable employee experience

Champion a high engagement culture

• Balance great strategy with strong execution through insights, agility, innovation, and simplicity

Relentlessly pursue excellence

HR Technology

HR Organization

HR Technology StackService D

eliveryTalen

t Man

agemen

tC

ore

Employee Self Service

Talent Acquisition Career & Succession Mgmt.

Total Compensation

Employee Feedback

Learning & Development

Performance ManagementOnBoarding

Knowledge Mgmt.

BenefitsPayroll HR Admin. Benefits Admin.

Collaboration

Wo

rkforce

Op

timizatio

n

HR/EE PortalHelpDesk Solution

Employee Well-Being Workforce Planning Leave/Absence Management

GAP

GAP GAP

Rewards/Recognition

GAP

Capacity Planning

TATS

Time & Attendance

GAP

GAP

GAP

GAP

GAP

Manage Self Service

Attract Engage/Retain Deploy

GAP

GAP

GAP

GAP

GAP

GAP

Business Intelligence/Analytics GAP

TATS

Mobile

GAP

GAP

Technology Gaps

# Capability Type Status/Priority

1 Global Payroll Solution New Discovery/B

2 Global Time & Attendance System New Business Case/A

3 Recruitment Marketing Platform New Approved/A

4 Applicant Tracking System Replace Business Case/A

5 Electronic Document Management System New Approved/A

6 Onboarding Module New Discovery/B

7 Total Compensation Module New Discovery/B

8 Performance Management-process/technology

Replace Process re-design /Tech Business Case/A

9 Career & Succession Management New Discovery/B

Technology Gaps

# Capability Type Status

10 Employee Experience System New Business Case/A

11 Rewards & Recognition New Discovery/B

12 Workforce Planning New Discovery/B

13 Capacity Planning/Resource Alloc. New/Expand Discovery/B

14 Leave/Absence Management New Discovery/B

15 Help Desk Solution Expand Discovery/B

16 HR/Employee Portal New/Integrate Discovery/A

17 Mobile New Discovery/Implement/A

18 Business Intelligence/Analytics New/Expand Discovery/A

Integrations

• UltiPro feeds the following:- Our Identity Management System (Active Directory, Email)

- Business Solver (Benefits)

- Transamerica (401K/Pension)

- Vitality (Wellness)

- Shoe U (Training)

• UltiPro is fed by our T & A systems

Key Successes past 3 Years

• Benefits

- Simplification/consolidation of benefit plans

- Vendor Consolidation

- Automated enrollment (Benefit Solver)

- Implemented Well-Being Model & Portal (Vitality)

• Implemented LMS & Connect (Cornerstone)

• Launched social collaboration tools

• Focused on process simplification (Recruitment, T & A)

Lessons Learned or Learning

• Focus on underlying business process first, technology second

• Leverage and engage (people) networks for cross-functional insight, expertise and feedback

• Embrace Agile as key methodology for planning and executing work

• Establish strong IT/HR partnerships

• Develop strong change management plans

• Don’t be afraid to try, test, and learn

HR/BT Partnership

How HR and IT Partner

• IT is a strategic partner to HR and has assigned a dedicated Business Partner to the HR organization

• The IT Business Partner partners with HR to develop their long-term and near-term technology plans

• IT starts with mapping technology needs to the HR Capabilities

• HR focuses on defining their business processes and capabilities, enabling IT to help identify or vet potential technology solutions

• As partners, technology decisions are jointly made

• IT’s goal is to stay abreast of the latest technical trends and share back opportunities with HR (i.e. Machine Learning, AI, etc.)

The Garage

The Garage, focuses on leveraging our heritage and principles to craft our future to deliver remarkable products, services and experiences.

By being bold and taking risks, The Garage is embedded across Red Wing Shoe Company, working hand in hand with our employees, partners and vendors in crafting the future.

Key Tenants of “Craft the Future” Framework• Dedicated staff - ideation, innovation process and transition into

the organization

• Enable the whole organization to participate in the Innovation cycle

• Make it clear and simple to submit and participate in ideas

• Make ideas visible and accessible

• Seed funding is beneficial to test and learn ideas

• Develop themes and guardrails to help accelerate and focus innovation

• Celebrate Learnings

• Executive engagement and sponsorship is imperative

Innovation = People = Behaviors = Change Management

• Instilling a culture of innovation requires changing behaviors of our employees

• Driving behavioral change requires tight partnership with Human Resources

• Leveraging a proven change management framework to engage with our employee base is imperative for success

• Dedicating staff to innovation is important to seed the cultural change

• Leveraging the full organization to drive innovation is the measure of success

The Innovation Funnel

Ideation

Evaluation

Incubation

Integration

Measurement

Generate and collect new ideas from employees, customers and partners

Evaluate ideas based on predetermined criteria to ensure that the best ideas are identified and pursued

Turn good ideas into real innovation by nurturing, developing, refining and improving over time

Bring the idea from incubation to fruition, by leveraging the organization to deliver the business value

Re-evaluate innovation needs based on changing requirements of the business

Innovation Themes

SAFETY SOLUTIONS CONSUMER

EXPERIENCES

MANUFACTURING

TECHNOLOGY ORGANIZATIONAL

PRODUCTIVITY

Innovation @ Red Wing Shoe

#cobbleIT

VALUE STREAM MAPPINGHERITAGE BLOG

Edge Trimmer

Ideas in the Pipeline

• Robotics

• Augmented Reality Training

• Shoe Making University

• Robot Feet

• RFID

• Materials Innovation

• Pilot Plant

• USA Cement

• Virtual Fit

• 3D / VR / AR

• Online Shoe Repair Tracker

Thank You For Joining Us!

Carrie Heimer-VP & CHRO

Carrie.heimer@redwingshoes.com

(w) 651-385-1350

(m) 651-208-1145

Marc Kermisch-VP & CIO

Marc.Kermisch@redwingshoes.com

(w) 651-385-1202

(m) 612-236-8901