1. You are critical to the success of the Code and strategy.
WRAPUP:
You are critical to the success of the Code and strategy.
A great future lies ahead of us if we all get behind the Code and strategy as one team.
Each of you will receive personal copies of the Code and strategy. Please read them closely.
The Code and strategy aren't something we do in addition to our everyday work. They are our everyday work.
Ultimately, we're going to achieve our strategy through your individual actions, through the goals you set for yourself and the strategies developed here in our Division.
Instructions
Before closing the meeting, remind employees that they are critical to the success of the Code and strategy and reaffirm your personal commitment and that of your leaders. Talk about the great future that's ahead of us if we all get behind the Code and strategy as one team. Thank employees for attending and for their commitment to the Code and strategy. Leave time for questions.
Suggested talking points
Each of you will receive personal copies of the Code and strategy. Please read them closely. As Jim Owens said in his opening message, and as I've tried to reinforce today, the Code and strategy aren't something we do in addition to our everyday work. They are our everyday work. Ultimately, we're going to achieve our strategy through your individual actions, through the goals you set for yourself and the strategies developed here in our Division.
I am committed to the Code and strategy, and so is every leader in this Division. We are committed to helping you understand how it applies to you. Over the next few months, we'll be working with you to explain what Vision 2020 means for you and how you can help us achieve our strategic goals of people, performance through products and processes, and profitable growth. We'll determine the critical success factors and strategic areas of improvement that are relevant for our Division, and we'll show you how you can make contributions.
We'll talk about the Code of Conduct and how we can put our values in action every day. Integrity, excellence, teamwork, and commitment are what I expect of you -- and what you can expect of me, of all the leaders in our Division, and of everyone you work with here at Caterpillar.
Before you go, let me leave you with one message. You work for a company that is admired the world over. But no company can become complacent, particularly in this rapidly changing global economy full of both opportunity and challenge. Our goal isn't just to be the best company in our industry. We want to be the best, period.
We have an outstanding heritage to build on, and now we have our road map for the future -- one that will ensure our success for years to come. Now it's time to get on the road together as one team, Team Caterpillar.
I believe that 15 years from now, whoever is sitting in my chair, whoever is sitting in Jim Owens' chair, will look back and see this as a pivotal moment in Caterpillar's history. My hope is that the people of Caterpillar in and I know that includes many of you much younger than me -- will be grateful for the direction we're embarking on today, as we lead Caterpillar to be a truly great company, admired and respected the world over for our products, our services, and above all, our people.
Thank you for coming today, thank you for being a part of this great team, and as Jim Owens said, thanks in advance for your commitment to living our values in action and helping us achieve our strategy.
Caterpillar Confidential: Green (11/09/05)

2. Warm up Quiz

3. Question 1: How do you put a giraffe into a refrigerator?
The correct answer is:
Open the refrigerator, put in the giraffe, and close the door.
This tests whether you tend to do simple things in an overly complicated way.

4. Question 2: How do you put an elephant into a refrigerator?
The correct answer is:
Open the refrigerator, take out the giraffe, put in the elephant and close the door.
This tests your ability to think through the repercussions of your previous actions.

5. Question 3:
The Lion King is hosting an animal conference. All the animals attend except one. Which animal does not attend?
The correct answer is:
The elephant
The elephant is in the refrigerator. You put him there.
This tests your memory.

6. Question 4:
There is a river you must cross but it is used by crocodiles, and you do not have a boat. How do you manage it?
The correct answer is:
You jump into the river and swim across. All the crocodiles are attending the animal meeting.
This tests whether you learn quickly from your mistakes.

7. Mining & Construction Equipment Division Decatur, Illinois
Good evening. I’m here representing Caterpillar’s Mining & Construction Equipment Division in Decatur, IL. I’ve been with Caterpillar for 32 years and I am currently the Communications and Learning Mgr., which means that I am responsible for all internal and external communications, all learning and development for all employees, public affairs and public relations, customer and dealer tours. I am also responsible for The Pacific Institute account at our Decatur facility. This is the company that has assisted us in our cultural journey.
Today I’d like to share with you Our Cultural Change Story at Caterpillar and in our Decatur community. (slide)
Mining & Construction Equipment Division
Decatur, Illinois
February 1, 2006

8. 85,000+ employees who
generate over $36 billion in annual sales and revenues
work on every continent of the world
share a vision of $50 billion
share a mission to make progress possible around the world
Caterpillar is a global company with over 85,000 employees. Around the world we generate over $36B in sales and revenues and we share a mission to make progress possible around the world. (slide)

9. World's largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.
Build roads, dams, houses and mines.
Provide transportation and electric power to the world.
Support the logistics needs of a variety of companies.
Technology leader in construction, transportation, forestry, energy, logistics and electric power generation.
We are the world’s largest manufacturer of construction & mining equipment, diesel and natural gas engines & industrial gas turbines. We build roads, dams, houses & mines. We provide transportation & electric power to the world and we also support the logistic needs of a variety of companies. (slide)

10. You are critical to the success of the Code and strategy.
WRAPUP:
You are critical to the success of the Code and strategy.
A great future lies ahead of us if we all get behind the Code and strategy as one team.
Each of you will receive personal copies of the Code and strategy. Please read them closely.
The Code and strategy aren't something we do in addition to our everyday work. They are our everyday work.
Ultimately, we're going to achieve our strategy through your individual actions, through the goals you set for yourself and the strategies developed here in our Division.
Instructions
Before closing the meeting, remind employees that they are critical to the success of the Code and strategy and reaffirm your personal commitment and that of your leaders. Talk about the great future that's ahead of us if we all get behind the Code and strategy as one team. Thank employees for attending and for their commitment to the Code and strategy. Leave time for questions.
Suggested talking points
Each of you will receive personal copies of the Code and strategy. Please read them closely. As Jim Owens said in his opening message, and as I've tried to reinforce today, the Code and strategy aren't something we do in addition to our everyday work. They are our everyday work. Ultimately, we're going to achieve our strategy through your individual actions, through the goals you set for yourself and the strategies developed here in our Division.
I am committed to the Code and strategy, and so is every leader in this Division. We are committed to helping you understand how it applies to you. Over the next few months, we'll be working with you to explain what Vision 2020 means for you and how you can help us achieve our strategic goals of people, performance through products and processes, and profitable growth. We'll determine the critical success factors and strategic areas of improvement that are relevant for our Division, and we'll show you how you can make contributions.
We'll talk about the Code of Conduct and how we can put our values in action every day. Integrity, excellence, teamwork, and commitment are what I expect of you -- and what you can expect of me, of all the leaders in our Division, and of everyone you work with here at Caterpillar.
Before you go, let me leave you with one message. You work for a company that is admired the world over. But no company can become complacent, particularly in this rapidly changing global economy full of both opportunity and challenge. Our goal isn't just to be the best company in our industry. We want to be the best, period.
We have an outstanding heritage to build on, and now we have our road map for the future -- one that will ensure our success for years to come. Now it's time to get on the road together as one team, Team Caterpillar.
I believe that 15 years from now, whoever is sitting in my chair, whoever is sitting in Jim Owens' chair, will look back and see this as a pivotal moment in Caterpillar's history. My hope is that the people of Caterpillar in and I know that includes many of you much younger than me -- will be grateful for the direction we're embarking on today, as we lead Caterpillar to be a truly great company, admired and respected the world over for our products, our services, and above all, our people.
Thank you for coming today, thank you for being a part of this great team, and as Jim Owens said, thanks in advance for your commitment to living our values in action and helping us achieve our strategy.
Caterpillar Confidential: Green (11/09/05)

11. Superior products We design, develop and deliver superior products
. . . that delight our customers.
. . . that deliver superior value to our customers.
. . . that give our customers the best alternate.
Superior products is our Driving Force.
The best product always wins.
Our products are the reason every job here exists.

12. Excellent Value
We design, develop and deliver superior products which create excellent value for our:
. . . Customers: Product and Delivery Performance
. . . Employees: Fulfillment, Development, Compensation
. . . Community: Growth, Philanthropy and Environment
. . . Suppliers: Collaboration, Development and Sales
. . . Stockholders: Share Value and Dividends
The last time we made an operating profit was in We made $26.4m of operating profit on sales revenue of $1.644b. That sales volume is the driving factor compared to where we are today ($1.139b estimated).

13. Excellent Value
. . . from the money we make selling our products we create value that :
. . . pays our salaries, benefits and retirement
. . . pays our suppliers
. . . allows us to invest in future products
. . . allows us to invest in our plant
. . . allows us to invest in our community
The last time we made an operating profit was in We made $26.4m of operating profit on sales revenue of $1.644b. That sales volume is the driving factor compared to where we are today ($1.139b estimated).

14. One healthy, high-performing team
We are proud to be healthy, high-performing members of Team Caterpillar that design, develop and deliver superior products which create excellent value for our employees, customers, suppliers, stockholders and community.
Engaged people are critical to our success.
A Constructive Culture engages people.

15. What is Culture? What is Its Impact?
Culture is the shared beliefs and values guiding the thinking and behavior of the organization.
The impact of a constructive culture can be measured on the bottom line.
Constructive cultures provide the customer better products and services than defensive cultures.
What is Its Impact?
So, What is Cultural Consensus Building? Well, let’s first define the terms…
Culture -- is the shared beliefs and values guiding the thinking and behavior styles and language of employees. For example:
What is normal.
How decisions get made when you can’t be there.
The way we do things around here.
How people will act under pressure.
The glue that holds the organization together
Culture grows out of the behaviors and language of the employees
Values -- are the principles, standards or qualities on which an organization considers worthwhile or desirable. (paraphrase American Heritage Desk Dictionary) Principles that an organization bases its decisions and actions upon. Values are usually simple and concise.
Behaviors – the actions or language that we observe
Source Michael O’Brien: Human Synergistics International

16. Passive/Defensive Styles
The Circumplex:
Blue:
Constructive Styles
Red:
Aggressive/Defensive
Styles
Green:
Passive/Defensive Styles
Copyright © 1998 Human Synergistics International. All Rights Reserved.

17. Culture and Performance Kotter & Heskett: Study of 207 firms over an eleven year period as reported in their book Corporate Culture and Performance
Defensive Cultures
Constructive Cultures
11 Year
Change in
166%
74% 1%
Revenue
682%
901%
756%
Stock Prices
Net Income
Circumplex/OCI Copyright 1998 Human Synergistics International. All Rights Reserved.
Financial information from Kotter & Heskett "Corporate Culture and Performance," Free Press 1992

18. Constructive Cultures
Defensive Cultures
Constructive Cultures
Encourages Employees to be:
Inactive and Reactive
Resists change
Assigns blame when something goes wrong
Uses Chain of Command to control and direct
Encourages Employees to be:
Proactive
Communicate open and freely
Takes responsibility and accountability
Is innovative and take risks
Circumplex/OCI Copyright 1998 Human Synergistics International. All Rights Reserved.
Financial information from Kotter & Heskett "Corporate Culture and Performance," Free Press 1992

19. Our Goal: Transform Decatur into a constructive culture where:
people enjoy coming to work
people retire as healthy as they started
customers receive superior products on time
we deliver excellent value

20. We are proud to be healthy, high performing members of Team Caterpillar that design, develop and deliver superior products which create excellent value for our employees, customers, suppliers, stockholders and community.
Individuals
Leaders
Culture
People create our products.
People make the difference.

21. One healthy, high-performing team
Personal Effectiveness
Imagine 21 – Employees/Spouses
Pathways to Excellence
Imagine 21 – Community Leaders
Leadership Effectiveness
Leadership Impact
Leadership Facilitator Education
Purpose in Life
Organizational Culture
Cultural Consensus Building
Values in Action - Behaviors
Future
Mar 2003
Organizational Effectiveness

22. Upper Management +213 IMPROVEMENT 2005 2003 I=945 N=8
Higher than vision of I=919

23. Current Culture +148 IMPROVEMENT 2005 2003
Comparison of old culture vs. new culture
I=386
N=180

24. One healthy, high performing team
Personal Effectiveness
Imagine 21 – Employees/Spouses
Pathways to Excellence
Imagine 21 – Community Leaders
Leadership Effectiveness
Leadership Impact
Leadership Facilitator Education
Purpose in Life
Organizational Culture
Cultural Consensus Building
Values in Action - Behaviors
Why change the culture?
1 = increase in performance
2 = employee prefer to work in a constructive environment which is why we see improved performance…employees more engaged/empowered, increase communication and teamwork/value of diversity thus more innovation…etc.
Mar 2003
May 2005
Goal

25. Close WRAPUP You are critical to the success of the Code and strategy.
A great future lies ahead of us if we all get behind the Code and strategy as one team.
Each of you will receive personal copies of the Code and strategy. Please read them closely.
The Code and strategy aren't something we do in addition to our everyday work. They are our everyday work.
Ultimately, we're going to achieve our strategy through your individual actions, through the goals you set for yourself and the strategies developed here in our Division.
Instructions
Before closing the meeting, remind employees that they are critical to the success of the Code and strategy and reaffirm your personal commitment and that of your leaders. Talk about the great future that's ahead of us if we all get behind the Code and strategy as one team. Thank employees for attending and for their commitment to the Code and strategy. Leave time for questions.
Suggested talking points
Each of you will receive personal copies of the Code and strategy. Please read them closely. As Jim Owens said in his opening message, and as I've tried to reinforce today, the Code and strategy aren't something we do in addition to our everyday work. They are our everyday work. Ultimately, we're going to achieve our strategy through your individual actions, through the goals you set for yourself and the strategies developed here in our Division.
I am committed to the Code and strategy, and so is every leader in this Division. We are committed to helping you understand how it applies to you. Over the next few months, we'll be working with you to explain what Vision 2020 means for you and how you can help us achieve our strategic goals of people, performance through products and processes, and profitable growth. We'll determine the critical success factors and strategic areas of improvement that are relevant for our Division, and we'll show you how you can make contributions.
We'll talk about the Code of Conduct and how we can put our values in action every day. Integrity, excellence, teamwork, and commitment are what I expect of you -- and what you can expect of me, of all the leaders in our Division, and of everyone you work with here at Caterpillar.
Before you go, let me leave you with one message. You work for a company that is admired the world over. But no company can become complacent, particularly in this rapidly changing global economy full of both opportunity and challenge. Our goal isn't just to be the best company in our industry. We want to be the best, period.
We have an outstanding heritage to build on, and now we have our road map for the future -- one that will ensure our success for years to come. Now it's time to get on the road together as one team, Team Caterpillar.
I believe that 15 years from now, whoever is sitting in my chair, whoever is sitting in Jim Owens' chair, will look back and see this as a pivotal moment in Caterpillar's history. My hope is that the people of Caterpillar in and I know that includes many of you much younger than me -- will be grateful for the direction we're embarking on today, as we lead Caterpillar to be a truly great company, admired and respected the world over for our products, our services, and above all, our people.
Thank you for coming today, thank you for being a part of this great team, and as Jim Owens said, thanks in advance for your commitment to living our values in action and helping us achieve our strategy.

26. There are minor changes in our alignment to Caterpillar’s Vision 2020
There are minor changes in our alignment to Caterpillar’s Vision At Caterpillar Decatur, it’s still the same game plan, same playbook.
Changes you will note are:
Our Vision is now our Mission with only a few minor word changes.
Our Guiding Principles box has been changed to reflect our Critical Success Factors.
Our Guiding Principles have been removed and replaced with Our Values In Action in the black bar.
Our Playbook processes are now under the heading of ‘Strategic Areas of Improvements’ or SAIs.
Suggested talking points
Let’s look at some of the SAIs
SAI – NPI: Conforming to the NPI process is critical to achieve QUALITY and drive key requirements to be the PRODUCT leader, including platform commonality, supportability, systems integration and key technologies across product families, including customer value-enhancing information systems.
SAI – Order-to-Delivery: Order-to-delivery is the process that enables us to achieve our VELOCITY CSF. It is measured through a conformance index, which includes our adherence to the Cat Production System and procurement processes.
SAI – Encoding 6 Sigma: We are the benchmark when it comes to deploying 6 Sigma. We have successfully embedded 6 Sigma and are performing at a very high level compared to the competition. But we are not going to rest here. If we are playing at a college champion level, we want to play at the professional level – this is our journey to encode and beyond.
SAI – Sustainable Development: This SAI ensures that our business units are working together, leveraging each others’ learning, and contributing their best to elevate our performance in making sustainable progress possible.