1. New Balance Case Study – Business Transformation Paul Kennedy HR Director

2. Our Mission “To be recognised as the world’s leading manufacturer of high performance athletic and active lifestyle products while operating in a socially responsible manner”

3. NB Famous for……… World cup -1982Euro Champs 1996

4. HISTORY Established 1906 Cushion made Arch Supports ‘Trackster’ In Multiple Widths Welcome the 990 World marathon Record 1999 Khalid Kanouchi RC 110 RC 1001 Tecnological Advances Released

5. EMEA Region- Key Facts 46 countries 750 million people NB: 2005- NB 1% market share Break Even at best High Cost structure Chaotic Leadership Culture of failure and poor execution Everything was complicated 25 Years of European Operation and Under Achievement

6. The Argument for Change? Retail environment changing Consumers more informed Pressure to reduce costs and improve speed to market Continuing to work the way we work today is not an option Need to fulfil our potential Need to be passionat e about execution Need to make significant contribution to our future success

7. Map the future Right Leadership on board Z corporation exercise Cultivate the Culture Organisation design Create the lean and winning machine

8. BY 2012 £250 Million company No 1 in Performance Running No 1 in Performance Apparel Top 3 in Lifestyle Top 100 employers to work for 15% ROS And….Marathon world record in NB shoes

9. Can we get to our goal by carrying on as usual? NO! £250 million “ If we keep doing what we’re doing, we’re going to keep getting what we’re getting” Stephen R Covey So we need to change …

10. NB Transformation Z corporation Facilitate Change to Understand Value as seen by the Consumer/Customer Leadership Fit for Purpose Focus our time on Value Added Activities European Centre of Excellence Simplify and Standardise ‘Partners that are Fit for Purpose’ Culture of Executional Excellence In all that we do

11. The Focus For Executional Excellence Culture/Speed/Agility Organisation Product/Consumer Focus Customer Service Profit, Margin/CostsRevenue Growth

12. Stages of change commitment I’m being told about something I know What it is I see the implications for us This is good Let’s test it Let’s do it Internalisation Institutionalise Adoption Installation Positive perception Understand the need for change Aware of change Contact How people commit to change We have to keep it going

13. Risk of loss of change commitment Prepare Phase Commitment Phase Acceptance Phase UnawareConfusedNegative Perception Decision not to support Aborted after Initial use Aborted after Extensive use 8) Internalisation 7) Institutionalise 6) Adoption 5) Installation 4) Positive perception 3) Understand the need change 2) Aware of Change 1) Contact

14. Results 2007 On target – 25% growth New Organisation 5 Key shoes ‘never out of stock’ 72 hours replenishment for key customers Simplify and Standardise Everything we do Customer and Associate Surveys

15. FLIMBY FACTORY 2006 1.4 Million Shoes 6-4 Person Teams 22% Productivity Improvement 25% Space Reduction Executional Excellence Well Established

16. Remember Use the resources you have Focus on where you want to go Measure your improvement not just in financial results Ensure you have senior management support and sponsorship Involve everyone

17. We are what we repeatedly do. Excellence, then, is not an act, but a habit. Aristotle