MDA Leadership Consulting ECOLAB’S TALENT PIPELINE: DEVELOPING GREAT LEADERS FROM WITHIN BEST PRACTICES INSTITUTE AUGUST 6, 2009 Sue Metcalf VP, Talent Development Ecolab, Inc. Mike Meyer SVP of Human Resources Bob Barnett EVP and Partner MDA Leadership Consulting

ECOLAB, INC. Global leader in cleaning, sanitizing, food safety, and infection control products and services. Serves customers in 160 countries. 26,000 employees. 2008 sales revenue of $6.1 billion.

Q: HOW FAMILIAR ARE YOU WITH THE LEADERSHIP PIPELINE MODEL? Very familiar Somewhat familiar Vaguely familiar Not at all familiar

THE ‘LEADERSHIP PIPELINE’ Described by Charan, Drotter, and Noel in 2001 Based on the natural hierarchy of work in most organizations. Each leadership level in an organization calls for new skills and a different focus to execute more complex responsibilities. Movement up the hierarchy requires transition through a series of critical leadership passages made possible by the development of the skills required at the next level.

BUSINESS CONTEXT Committed to 15% annual growth for 5 years in 2003 – Ecolab would double its size by 2007 requiring… Capturing greater share in current markets. Entering new market segments. Developing a broader range of cleaning and sanitizing products and services. Significantly expanded efforts and operations globally. Lack of available leadership talent was viewed as a primary constraint.

ECOLAB’S CULTURE Strong sales culture – 60% of Ecolab employees in sales or sales/service roles 5 business “drivers”… Talent Development. Preparing associates for current and future success. Leadership. Creating a vision, engaging others, and leading by example. Relationships. Identifying and building networks to advance business initiatives. Innovation. Fostering an environment that drives creativity and risk-taking. Delivering Results. Achieving goals by effectively managing resources to get things done.

LINK TO ECOLAB’S CULTURE

THE ECOLAB TALENT PIPELINE The way the pipeline works is straightforward … The “pipes” that you see here represent the five natural levels of work that we explain in detail in the Ecolab Talent Pipeline Guidebook that you will receive in this afternoon’s breakout session … Each level is distinct and contains a unique blend of skills, competencies, and work priorities. This simple yet profound concept gives us the foundation for deliberate, consistent, and effective talent development throughout Ecolab … and a foundation for driving development in the key areas that will yield long-term growth … and competitive advantage. It holds each of us accountable and provides each of us with an explanation of our roles in building a stronger Ecolab through people. Distinct Roles Unique Skills and Work Priorities Targeted Development 1

THE ECOLAB TALENT PIPELINE Pulling together everything we learned, we built the Ecolab Talent Pipeline --the emphasis here is on Ecolab. It is especially designed for Ecolab associates … to assist you and the associates who work for you to not only deliver excellent results… but also to have the opportunity to improve and grow… The goal is to keep the pipeline full and flowing… 1

SUCCESS INDICATORS AT EACH LEVEL Managing Managers Creates opportunities for managers to gain new skills. Holds managers accountable for managing and developing others. Is seen as supplier of quality management talent. Ensures others understand the strategy and how it relates to what they do. Sets the standard for excellence in teamwork. Influences effectively upward and across the organization Maintains an effective external network. Breaks down communication barriers. Enhances direct reports’ relationship-building skills. Identifies new, value-added work to drive growth. Achieves growth by leveraging other parts of the organization. Creates a culture where growth is expected. Takes strategic action to drive customer retention, account penetration, and new customer acquisition. Develops and implements long-term plans that create new opportunities and drive growth. SUCCESS INDICATORS AT EACH LEVEL

SUCCESS FACTORS BY BUSINESS DRIVER Leads by example – goes the extra mile with associates and customers. Willingly accepts supervision and work direction. Is someone others want on their team. Instills a sense of identity and purpose in team members. Articulates the business direction and ensures it is embraced by the team. Is sought out by others as a mentor or coach. Ensures others understand the strategy and how it relates to what they do. Sets the standard for excellence in teamwork. Influences effectively upward and across the organization. Is viewed with confidence and credibility. Models leadership and business best practices. Creates and executes an effective strategy for the function. Excels in strategy development and execution. Drives team performance based on strategic requirements. Partners effectively across divisions and businesses. Leadership

KEY PASSAGES IN THE TALENT PIPELINE From achieving results individually through technical or professional skill to achieving results through others. From teamwork to team building. From personal planning to planning for the team and individual results. From achieving results through others to achieving results through managers. From a top line revenue focus to profitable results. From teambuilding to organizational building. From planning for a team to planning for multiple teams’ results. From achieving results through managers to achieving results for the function. From profitable results to state-of-the-art results. From organizational building to functional excellence. From planning for teams to planning for functional or divisional results. From achieving results through functions to achieving results through comprehensive business management. From state-of-the-art results to competitive advantage. From functional excellence to customer value. From planning for function results to creating long-term strategic plans. Managing Self to Managing Others Managing Others to Managing Managers Managing Managers to Function Manager Function Manager to Business Manager

EXAMPLES In 2008… 2000 new hires in the US 250 hiring and promotional decisions at the “managing managers” level (180 promotions, 70 outside hires) Doubled the number of General Manager roles since 2003 80 hiring and promotional decisions at the executive level (30 outside hires, 50 promotions)

FOCUS ON DEVELOPMENT Compare Results Development Planning/IDP Assess Capabilities Development Planning/IDP

KEY SUPPORT SYSTEMS & PROCESSES Individual Focus Organizational Focus Talent Pipeline Manual – launched globally Leadership Assessment On-boarding/Career Start Program 180 Feedback & IDPs Training at Key Transition Points Focus on Potential Talent Reviews Talent Council

ECOLAB’S HIGH POTENTIAL MODEL

RESULTS 265% increase over 2001 sales revenue. Talent Pipeline fully implemented worldwide. Top two tiers of executive-level leaders are fully in place. Pool of ready-now general manager candidates has increased three-fold. Identified and developed record numbers of high potential leaders who are ready to assume greater leadership responsibilities. Record number of developmental job rotations and cross-divisional moves. All associates regularly complete the 180° assessment; discuss development with their manager; and have created practical and realistic development plans.

LESSONS LEARNED Link to business need and strategy Consistent and active top management engagement Clear, understandable framework – widely communicated Cannot ignore the organizational culture Idea is simple, implementation is complex; defining competencies (by level) is hard Accessible, practical tools and support for development Need for variety of supporting systems and processes Ongoing focus – process never ends

Contact Information Mike Meyer: Mike.Meyer@ecolab.com Sue Metcalf: Sue.Metcalf@ecolab.com Bob Barnett: bbarnett@mdaleadership.com