Global Readiness Event

Is it possible to change interactions between groups ?

Dec 6, 2012

Applied Materials - G.I.S. Global Culture Program – Case Study

Agenda

∗ How did it all start?

∗ Applied Materials, GIS, Global Culture Program

∗ The challenge and the approach

∗ The mission and main initiatives

∗ Program Measurements

∗ Lessons learned

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How did it all start?

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“…In addition, Applied is implementing a comprehensiveprogram to better align its global organizations and processes,including initiatives to enhance the Asia supply chain andimprove back office and information technology infrastructurefor more efficient transaction processing.”

Extracted out of Applied Materials annual report

Applied Materials at a glanceWorld leader in Nano manufacturing technology™ solutions

1970+

Computing

1990+

Communications

2010+

Energy and Environment

Public Traded Nasdaq: AMAT

Market Cap: $16.5 billion

Founded: November 10, 1967

Headquarters: Santa Clara, California

Manufacturing: China, Germany, Israel, Italy, Singapore, Switzerland, Taiwan, United States

Patents: ~8,200 issued

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Applied Materials Worldwide

Israel

104 Worldwide Locations

India

KoreaEurope

Taiwan

UAE

China

South East

Asia

North America

Japan

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The Challenge and Approach

∗ Background

∗ The Business is moving to Asia

∗ Deep changes in organizational structure requiringmatrix mindset

∗ Need for standardization, cost reduction andelimination of local solutions

∗ GIS needs a new global operating module, from UScentric to a real global organization, close to thecustomer

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Global Culture Program

Main findings:

∗ core-periphery network

∗ 80% of US of interactions are internal

∗ Asia and EMEA interact 40% - 60% with US

∗ Interaction between Asia and EMEA is less then 10%

Network Analysis Survey (2010)

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Global Culture Core Team

China

Japan

Singapore

India

Korea

Ireland

Austria

Israel

USA

France….

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Global Culture Program - Mission

The 'Global Culture' program mission is tosupport transition to a new globaloperating mode, from US centric to atruly global organization operatingeffectively in collaboration and trustwhile strengthening global leadershipand presence in Asia.

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The program will create an environment that:

∗ Increases employees’ engagement

∗ Reduces cultural barriers and uses cultural differencesas an advantage

∗ Builds Global GIS leadership

∗ Leverages skills across all locations

∗ Operates globally (teamwork engagement, forumsand trust) to increase effectiveness

∗ Builds communication around global time-zones

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Global Culture Program - Mission

Main Initiatives

Job Families&

Career Paths

Job Rotation

Flexible Hours

Global Team

Building Events

Global Leadership

Profile

Roles & Responsibilities

Global Idea Forum

Learning & Mentoring

Global Team leads Global Projects,

Financial visibility,

Business Partners,

And more…

Globalization Communication & effectiveness

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Initiative Example: Leadership Profile

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CUSTOMER FOCUS

• Strives to better understand and partner

with our customers

• Ability to put the needs of the team and

Applied Materials above yourself

ENABLE OTHERS TO ACT

• Strengthen others through personal

development

• Enlists others in a common vision – goal –

scope or work

• Recognizes contributions

• Builds a spirit of community

• Foster collaboration by building trust

• Makes others successful

Initiative Example: Leadership Profile

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COURAGE TO LEAD IN A COMPLEX

ENVIRONMENT

• Sets the example through words and

actions

• Proactive, takes the initiative and drives

opportunities to closure

• Has the confidence to work independently

with minimal direction

• Possesses the courage to take risks and

drive change

• Addresses conflicts early and positively

manages them

CULTURAL AWARENESS &

ACCEPTANCE

• Knowledgeable and curious

about global cultures

• Adjusts style to cultural

differences

• Strives to engage and involve the

global team – open boarders

Project and measurements

GIS Global Culture - key milestones

∗ June 2010 Network Survey

∗ July 2010 Formation and Workshop #1 (SCLA)

∗ October 2010 Workshop #2 (Singapore)

∗ January 2011 Workshop #3 (SCLA)

∗ February 2011 Baseline Survey

∗ June 2011 Mini workshops and wrap up plan

∗ February 2012 End of Program

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Job families

A. My area of responsibility and job description are well defined

X % agree or strongly agree

B. I understand my career path options X % not sure, disagree or strongly disagree

R&R

C. I understand how my objectives contribute to the success of GIS

X % agree or strongly agree•Ratings consistently high across all regions

D. Roles and responsibilities are clearly communicated and aligned across GIS

X % not sure, disagree or strongly disagree

Global team lead global projects

U. I am able to influence key decisions that fall within my global area of responsibility

X % agree or strongly agree

W. Leadership opportunities are available in the regions

• Global leadership is a key improvement opportunity

Baseline Survey – sample findings

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Flexible hours

H. My manager supports working flexible hours X % agree or strongly agree

I. On average, how many hours do you spend each week in meetings outside of the 7:00 am to 6:00 pm time frame in your time zone

X % with >5 hrs.

K. How many days a week on average do you work from home ?

• X % almost full time at home• X % work ≤1 day/wk at home• Asia region works fewer days from home

O. How often do you have 1/1 meetings with your manager?

• X % have 1/1 meetings biweekly or more often• X % have 1/1 meetgs monthly or less often

P. How often do you meet with your manager in person ?

• X % meet in person at least quarterly• Europe and Asia regions meet their manager in

person less then twice a year• Executives met with their managers most often

Job mobility and rotation

Y. I am interested in job rotation as an opportunity for advancing my career or gaining professional experience / personal development

X % agree or strongly agree

Baseline Survey - Main findings

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Objective Current Value Target

Overall program progress to planX % complete

on schedule for May 11 …100% to plan

Organization assessment survey X (baseline) 10% improvement (3.82)

Network Analysis Survey

Workflow: Asia- X % | EMEA- X %

| US- X%

Advise: Asia- X% | EMEA- X% |

US- X%

10% improvement of

workflow outside of region

and Advise seeking

Job families with R&R defined

X % defined; coordination with

Corp Compensation required

prior to finalization and

communication - on track for

100% by EOFY

X % by end of fiscal year

Creation and successful completion of pilot TBD - Q3/Q4Pilot completed by Oct 31

2011.

% of identified and approved rotations in

process by x date.

Wasn’t measured yet –

TBD - Q3/Q4

Documented and approved

Target % and date to be

defined (based on pilot)

% of employees that meet 2 or more times /

year in person with manager (incl group &

1/1)

% of employees that meet once / year in

person with manager (incl group & 1/1)

X %

X %

X % with survey rating ≥ 3

X % with survey rating ≥ 2

Define and rollout process for R&R

definition and updates. Progress to plan.

On track.

R&R defined, publication

planned within 2 weeks.

SLT review in April.

Published in Q2.

Rollout update process

during Q3. (Monthly)

Published R&R updated

quarterly

KPI’s for Global Culture Project

Overall Program

Job Families

Job Mobility

& Rotation

Flexible Hours

Roles &

Responsibilities

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Results

● Network Composition moved in a positive direction for each regionand each question relative to 2010 – in many cases these changesexceed X %

● AMER, ASIA, and EMEA now share the “core” of the network –significant change from the AMER-dominated network of 2010

● ASIA and EMEA are at least as influential (if not more so) than AMERin terms of their connectedness to other influential individuals

● AMER has been relieved of the burden of serving as a bridge to othersubsections of the network – though this work still continues in ASIAand EMEA.

The new norms and values

� We strive to an environment of strong and effective global matrixorganization, reduce culture barriers, build global leadership andincrease employee engagement

o New Regional and Country Business Partners roles to enable Close to the customerand matrix management of remote/distant employees

o Defined standard, Global and simple Job families with clear Career path

o Structured Job rotation and mobility process to support organizational flexibilityand leadership skills development per environmental needs

o Global leadership development through empowerment, defined values, mentoringand matrix/remote training

o Built cross culture engagement and trust through global team building activities

o Developed “sharing the pain” and “flexible hours” practices for remote/virtualteam work

o New working methods and processes to enhance global Communication, IdeasSharing and Financial visibility

Insights from this case

∗ Even Global Organizations can go through “regressive periods”due to different factors (structural changes, mergers, etc.)

∗ Changing interactions between groups is possible and doable

∗ Interactions between groups can be measured and changed.Network Analysis is a great tool to map and understandinteractions

∗ Managing cultural change as a project (tasks, milestones, KPIs,etc.) is critical.

Insights from this case

∗ Soft elements like culture and cultural gaps affect performancedramatically

∗ Teamwork and people’s excitement are critical for success

∗ Sometimes simple mechanisms like “sharing the pain” can havestrong impact

∗ Different areas in one company can have different globalmaturity levels

What did we contribute ?

∗ Project Concept Definition

∗ Workshop Facilitation

∗ Network Analysis Survey – construction and analysis

∗ Survey & KPIs construction and measurement

∗ Task Team Facilitation & Input

∗ Project Management

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Thank You !