SAE International Organization Annual Leadership Seminar January 25, 2002

Purpose History of Associations SAE Profile Structure Trends Changing Associations Staff Role Member Role Operating Board and Committee Overview

Associations Trade Professional Company DrivenIndividual Driven (Common Interests) Serving Public Interest Enhance economic, social, and political climate (country world) Desirable atmosphere

Trade Associations Professional Societies Japan Ancient China India Egypt Scientific Society (Naples, Italy) Organized 1560 American Philosophical Society (Philadelphia, PA, USA) Founded 1743

Professional Associations are a manifestation of organized volunteerism Information Sharing Vehicle/medium through which specialists in given fields share their expertise/experience to advance particular field.

Evolution of an Association NewEmergingDevelopingLarge Society of Automobile Engineers Society of Airplane Engineers and Tractor Engineers SAE International Serving members and automotive industry

Profile Individual memberships based on education and experience Publisher and distributor of technical literature World’s leading resource for mobility technology Non-for-profit No lobbying

Corporate/Stockholder Structure

Association Structure President & Board Committees, Program Offices Exec. Vice Pres. & Staff Operating Board Operating Board Operating Board Operating Board Operating Board

For-Profit Decision Making Boss Individual Decision Making Subordinates Hierarchy

Association Consensus Decision Making Committees/Teams Make Consensus Decisions

Decision Making-Comparison Boss Individua l Decision Making Subordinates Consensus Decision Making Chair

5 Key Trends Changing Associations 1 Change in the nature of change itself 2 Increased demand for outcome accountability 3 Volunteer members’ life style changes 4 Technology advancements 5 Globalization

5 Key Trends... Rate of Change

5 Key Trends... Change in the Nature of Change Rate of change is increasing dramatically. Change is here to stay. Successful leaders demonstrate flexibility. September 11, 2001 Roles of OEMs/Tier 1s

SAE’s Response... Change in the Nature of Change SAE’s Governance Process enables rapid response to change: Flexible structure Knowledge-based decision making Empowered operating boards/committees

5 Key Trends... Increased Demand for Outcome Accountability Focused on results Customer needs drive change Perceived and real benefits are assessed What’s in it for me? Board’s focus on assuring achievement by OBCs and staff

Standards Networking Technical Literature Technical Conferences Problem Solving Sessions (TOPTECs) Leadership Skills New Products Cost Reduction Improved Quality Process Improvements Standards Managemen t Skills ENGINEERSENGINEERS COMPANYCOMPANY SAE’s Response... Increased Demand for Outcome Accountability

5 Key Trends... Less Time From Volunteer Members Increased complexity of work and life Competition for discretionary time Competition among not-for-profits for talented volunteers

SAE’s Response... Volunteer Members’ Life Style Changes Board of Directors selected “Changing Member Needs” as a strategic issue in Board of Directors identified eight factors influencing the changing needs of members. Board of Directors requested all operating boards/committees to modify their Relationships Policies of the Board Governance Manual to include diversity. Workshop on Transforming SAE into a Knowledge Providing Society was conducted in 2001.

Volunteer Members’ Life Style Changes “Crave” New Information Want Interactive “Experience” Professional Development Management Support Electronic Communication

5 Key Trends... Technology Advancements Communication technologies are changing the way we do business Internet CD-ROM Video teleconferencing

SAE’s Response... Internet Board of Directors Electronic Product Development & Delivery Task Force Information Technology Strategic Plan SAE Personalized Website Four Areas of Focus: TIMS Website e-Commerce CMS On-line Discussion Forums

SAE’s Response... Internet (Cont’d) Standards and papers - Digitized 85% of Congress Papers received in digitized format Launched personalized web pages in December 2000 Over 600 standards committees use electronic communications for committee work. Tailor corporate packages of SAE Information

5 Key Trends... Technology Advancements Automotive technologies are expanding and advancing, creating opportunities for SAE. SAE responds to the information explosion Increased knowledge products Computerized combining of information Rapidly addressing new technologies in Cross-OBC manner SAE is focused on assuring technical excellence 42 Volt Fuel Cells Intelligent Vehicles Lean Operating Systems Motorsports Aerospace Topic (Get from Scott Klavon)

SAE’s Response... Technology Advancements Service Technicians Society Advanced technical information for technicians Performance Review Institute Developing strategic, non-proprietary intelligence on quality based upon analysis of audit results database

SAE Response... Information Knowledge Board of Directors has directed SAE to: “Further transform SAE from an Information Providing Society into a Knowledge Providing One.” Personalized web page

5 Key Trends... Globalization Worldwide mobility community Think globally and act locally Opportunity to build international relationships Facilitate technology exchange Create a global network of mobility professionals

Summary The mobility community is changing The role of societies is changing SAE is aggressively responding

Board Blue Ribbon Panel Met throughout 2000 to develop recommendations for SAE – to assure SAE’s success over the next decade Developed 12 recommendations The SAE Board is responding to each

Board Blue Ribbon Panel (Cont’d) OBCs have a key role in three of the recommendations Create infrastructure and decision-making processes that encourage reasonable risk-taking, facilitate reduced cycle-time for all new products, and respond to customer needs. Customize products and services based on membership/customer needs. Work with SAE staff to utilize SAE and Affiliates to rationalize processes, help companies develop internal standards, and provide high level neutral forums for competitive cooperation.

Board Blue Ribbon Panel Other Recommendations SAE staff organization should be diverse and function globally.  Assigned to EVP Expanded training Satellite sites (6) Structure EVP job criteria based on BRP conclusions.  Transition Planning Task Force (Complete) Hire next EVP based on revised criteria developed by Transition Planning Task Force.  Transition Planning Task Force (Complete)

Board Blue Ribbon Panel Other Recommendations (Cont’d) Develop business model to include overall society financial stability and value chain of SAE products and services.  Finance Committee Subteam Seek mergers, joint ventures, cooperative agreements and alliances that enhance value to stakeholders.  SLT continues to address  Tier 1 Supplier relationship explored and enhanced.  Missionary commitments

Board Blue Ribbon Panel Other Recommendations (Cont’d) Take a more active role in the area of harmonization of standards and possible alliances with regional standards organizations.  Technical standards Board addressing  Performance Review Institute  AECMA and Japan relationship

Board Blue Ribbon Panel Other Recommendations (Cont’d) Change the ANC process to ensure the election of effective leaders that satisfy all Board and Blue Ribbon Panel criteria.  Agreed to nine additional delegates to ANC  Change in ANC voting process  ANC modifications  Letter from Neil encouraging nominations from non- U.S.  Three Vice Presidents  Rotate “automatics”

Board Blue Ribbon Panel Other Recommendations (Cont’d) Board of Directors’ membership should reflect the broader mobility areas.  Change in voting process  Addition of “three” Vice-Presidents  Affiliates on nominating committee  Rotation of “automatic” seats to six OBCs EEB, EMB, FBOT, MSB, SB, TSB

Board Blue Ribbon Panel Other Recommendations (Cont’d) Become the leading source for technical information/knowledge in the mobility industry and provide networking capability for individuals to update their skills to maintain their career mobility. This should include providing professional resources, technical information and knowledge continuity to an evolving career. Career Pathway concept by Career Mobility Subteam Agreed to strategic direction of SAE Brands of the future.

Principals of Policy Governance A Board should Define and Delegate, rather than React and Ratify. Ends determination is the Pivotal Duty of Governance.

Defining Member and Staff Roles

Member Organization Engineering Meetings Board Engineering Education Board Foundation Board of Trustees Membership Services Board Sections Board Service Technicians Society Technical Standards Board Committees PRI Board of Directors Program Offices

Member Role... Determine SAE’s purpose and Objectives (Ends) Determine membership qualifications Establish policies (Ends/Means) Approve budget (Finance Committee) Monitor performance Make technical decisions

Staff Organization Executive Vice President Executive Office SAE Foundation Human Resource Office Washington Office Executive Director Performance Review Institute Executive Director Designated Business Units Designated Business Units

Board Expectations of Staff VisionaryStrategistPlanner Advisor to Board/ Committee Facilitator of Board/ Committee Meeting Meeting Organizer AdministratorServe and Support EVP and Group Directors Business Unit Managers Professional Staff (e.g. Engineers) Support Staff Early years of SAERecent Past of SAECurrent Expectations

Changing Staff Role... Traditional staff role: take minutes help develop and distribute agendas provide communication mechanisms provide continuity of knowledge base

Changing Staff Role... Changing staff role: member role and staff role complementary asked to provide higher level of participation  in generating ideas for achieving Objectives (Ends)  in developing plans for achieving Objectives (Ends)  Asked to increase capability in the Organizational Development (OD) area

You Can Expect Staff to... Provide guidance in implementing Objectives Serve as a continuity link and conduit to information Maintain measures Coordinate customer feedback Facilitate committee meetings Be aware of and stop activities which contradict policy Make suggestions on new strategic issues related to your OBC

SAE Organization Committed to responding to customer needs Consensus decision making Large range of products and services Vision and direction setting by Board of Directors Operating board/committee empowered to implement Dedicated to member satisfaction