2013 Collin Technologies Consensus Scorebook - National Institute ...

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Nov 18, 2013 (3 years and 9 months ago)

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Consensus Review Scorebook

Final

TST2013

0
5
/2
3
/2013
































This is an authentic scorebook produced by the 201
3

Training Scorebook Team.
After additional

validat
ion

against the
application
and the

Criteria for Performance Excellence
, a

final feedback report will be posted on the Baldrige Program’s
Web site in July.




2

Key Factors Worksheet

P.1a Organizational Environment

For
-
profit, small business organization

For
-
profit small business
.

H
igh
-
tech manufacturer in the
interconnect industry founded in 1971 in Nashville, TN. The organization expanded its
Employee Stock
Ownership Plan

in 2007
;

all stock is owned by active employees, with no individual owning more than 50
%.
All products manufactured (i.e., single
-
, double
-
, multilayer printed circuit boards and rigid
-
flex circuits) and
Contract
R&D services are provided directly to its customers.

Culture

O
ne of family
,

where EO
s

are

treated fairly and trust one another; as an owner
,

each individual
actively contributes to the company

s success.

Mission, Vision, Values (Figure P.1
-
2)


Mission




Engage customers of interconnect circuitry with the products for tomorrow



Provide EOs with a Best Career Location® and superior return



Sustain society and the environment



Enhance our communities

Vision

Lead circuitry innovation for the future

Values





Collaboration
:

we are one team pursuing one vision



Commitment
:

we deliver on

our promises; living our values through integrity, trust
, and respect



Creativity
:

we in
vest in continuous innovation



Courage
:

we are courageous in our pursu
it of business excellence)



Colossal
:

we are proud of our business
performance compared to others

Core Competencies (Figure P.1
-
2)



Ingenuity:

leading advancements in the industry, especially in the areas of engineering and R&D;



Expertise:

understanding our customer

s business and exceeding expectations through robust
operational processes;



Exception
al People: building lasting relationships with all customers and stakeholders through the
Personal Touch.

Product Mix (Figure P.1
-
1)

25%
c
ontract R & D; 20%
multilayer printed circuit bo
ards

US
electronic
manufacturing service
s (EMS); 15%
multilayer printe
d circuit bo
ards

International EMS; 40%
rigid
-
flex
circuit
s

Regulatory Requirements




ISO certifications: quality system (ISO 9001:2008 and AS
9
1
0
0

for aerospace), environmental (ISO
14001:2004)



Follows guidance and complies with

ISO 26000 for social
responsibility, ISO
/
TR 12885:2008 for
Nanotechnologies

Health and Safety



Facilities compliant with ITAR, RoHS, WEEE, and the July 2010 U.S. prohibition of ores and metals
used to finance conflict in the Republic of Congo and adjoining countries



UL
-
approved



EOs certified to various EIC standards for testing and inspection, J
-
STD
-
001 for solder process, and
ICP 7711
/
7721 for repair station



Complies with state and national OSHA requirements, U.S. Department of Labor laws, General
Accounting Practices, and gui
delines of Sarbanes
-
Oxley

Facilities & Assets

Include a three
-
building campus:



Administration Center

Administration & IT (includes CNet and Supervisory Control and Data
Acquisition System)



R&D Center

R&D clean
-
room facility (ranging from Class 100
/
ISO5 to
Class 1/ISO3) with assets
including laboratory equipment, leading
-
edge microscopy, proprietary fine
-
line imagery prototyping
equipment, destructive testing laboratory



Operations Center

Class 100,000/ISO 8 clean room, automated production lines; production
areas
that support ball grid array assembly, board repair, and conformal coating process


3

Workforce Demographics (Figure P.1
-
3)




425 employees; F 51% and M 49%



Employee
g
roup
s
: 28
% technical, 54% factory, 18% supp
ort



Diversity: 64%

white (vs. 74
%
community), 19% African American (vs. 15% community), 10%
Hispanic (vs. 6% community), 7% other (vs. 5% community)



Education: BA/BS +
(engineers & supervis
ors),
associates (techni
cians), HS/GED + (
a
ll)

Workforce Health and Safety Requirements

Safe handling

of various chemicals and materials; annual
refresher training on Material Safety Data Sheets (MSDS) and behavior around chemicals; training in safe
material handling, proper lifting, and use of protective equipment.

P.1b Organizational Relationships

Organizational Structure

Independent Advisory Board (AB) led by company founder and Chairman of the
Board; trustees appointed to represent EO interests in AB

s fiduciary review of the ESOP. CEO reports
directly to the executive committee of the board. Seni
or leaders report to the CEO; managers report to senior
leaders. All other EOs
report to either senior leaders or managers
.
The Leadership Team (LT) comprises
s
enior leaders
.

Business
/
Customer Segments




Aerospace (national)

cockpit and navigation instrumen
tation, flight control modules; major
customer

exclusive contract with GBN Corp.



Personal Electronics (
PE;
international)

cell and satellite phones, tablets and microcomputers,
cameras, toys; major customers

NexTee, MEE2, Sleeker



Contract R&D (national)

circuitry design assistance, development of fine
-
line imagery, production
processes; major customers

Valley Tech and Newton
c
omputers

Stakeholders

EOs, customers, Partner Suppliers, EMS partners, and greater Nashville community

Stakeholder Requirements

Cus
tomers (Figure P.1
-
4): Cir
cuitry reliability,
HDLW

circuits
, competitive
pricing, support for product life cycle,
OTD,
high qua
lity. Priority of each requirement varies by
business
/
customer segment

Community: provide secure employment opportunities, stewar
d of air and water quality, partner in business
community (i.e. provide leadership in civic organizations, support community development activities)

Workfo
rce Requirements

(Figure P.1
-
3)




Feel s
afe and secure on the job



Take pride in being an owner of the
organization



Make a difference on the job



Have opportunities to learn and advance



Have competitive wages and benefits

S
uppliers and Partners

over 70 suppliers in the supply chain providing substrate materials, process
chemicals, customer
-
imaging equipment,

technical support, calibration and special testing services.



Two (2) special EMS partners used to provide high
-
volume lamination, complex population of circuits,
and circuit assembly



Research partners

three leading universities exploring options for sili
con chip replacement



Vendors

supply commodity items and qualified through historical

Supplier Communication

CNet is primary conduit for information transfer; other options include
teleconference and video conferencing

Supply
-
Chain Requirements




Partner
Suppliers
: ability to innovate technology, high quality and reliability of products, use of
leading
-
edge technology, and price



Vendors: product quality, on time delivery, cost

P.2a Competitive Environment

Market Share

Roughly equal split in share of niche
market among American companies capable of
manufacturing circuits with all U.S. content


4

Key Competitors

International conglomerates (e.g., Superflex); other American companies with about
equal market share that are capable of manufacturing circuits with al
l U.S. content (e.g., USA Circuits, Ace
Circuitry, and Ridgeford Technology)

Key Changes

Contract R&D business unit established in 2005; divested manufacturing facilities in France
& Japan in 2006 using funds from sales to expand Nashville facility; expand
ed
ESOP

in 2007

Technology changes: ability to double number of transistors on a silicon chip nearing full capacity; research
on replacing copper with other conductive materials; exploring use of photons rather than electrons as a way
to redefine its niche

market

Competitive and Comparative Data Sources




EIC

for industry trends and worldwide industry comparisons including the book
-
to
-
bill ratio and
annual salary
/
compensation studies



Information from Baldrige Award recipients



Manufacturing Sector Best Plant

Program online publications and Best Career Location® program



Customer and EO engagement surveys



U.S. Employee Owners (USEO) and ESOP Association for performance comparisons

P.2b Strategic Context

Strategic Advantages (Figure P.2
-
1)




SA
-
1
Business
reputation



SA
-
2
R
esponsiveness



SA
-
3

Personal Touch




SA
-
4 Intelli
gent r
isk



SA
-
5 Capa
ble proc
esses



SA
-
6 Level 2 Sustainability



SA
-
7
EOs

that hold certifications for competencies related to their work and enjoy Best Career
Location® and ESOP

Strategic
Challenges (Figure P.2
-
1)




SC
-
1 Industry growth by acquisition



SC
-
2 Expanding customer R&D services



SC
-
3 HDLW




SC
-
4 Level 3 Sustainability



SC
-
5 Engaging EOs in sustainability



SC
-
6 Leadership development

Strategic Objectives




SO
-
1 Increase Net Promoter Scor
e



SO
-
2 Increase current market share over the next three years by business segment



SO
-
3 Improve EO participation in moving toward refined business model



SO
-
4 Improve demonstrated leadership and decision making by EOs



SO
-
5 Maintain 100% employee ownership

P.2c P
erformance

Improvement System

Performance Improvement System




Use of Baldrige framework since 1992



CI
2

Integrated performance improvement and sustainability system with two main components
(continual innovation and continuous improvement
)



PDCA
methodology



Use of Lean Six Sigma (LSS),
CI
2
, and other improvement techniques to address gaps identified during
internal process audits


5

Key Themes Worksheet

a.

What are the most important strengths or outstanding practices (of
potential value to other organi
zations) identified in the applicant

s
response to
p
rocess
i
tems?

1.

The applicant demonstrates its customer focus in well
-
deployed approaches that underscore its core
competencies of Expertise and Exceptional People.
Data from m
ultiple methods
of

listen
ing

t
o
current, former, and potential customers and determin
ing

customer satisfaction and engagement

including focus groups, reports, and surveys

are

record
ed
via the
Customer Relationship
Management (
CRM
)

system, which includes information on all customer inte
ractions.
T
h
e applicant

use
s this information

to support

strategic and operational decision

making and to identify corrective
actions and process improvements.
The company assigns a

Customer Advocate (CCA) to each
customer to help manage the relationship throughout the customer life

cycle
. Complaints are

systematically log
ged

into CNet, route
d

to the appropriate CCA,
and
track
ed
to resolution
, with

notifications
sent
to key internal
stakeholders. These approaches support the
applicant
’s
strategic
advantages of responsiveness and
Personal Touch

and may help

achieve
the
strategic objective to
increase market share.

2.

The applicant

s systematic approaches to creating a positive workforce e
nvironment and enhancing
workforce engagement indicate that it values its employee owners (EOs). Senior leaders use multiple
methods to communicate with and engage EOs, including meetings, electronic and social media,
walk
-
arounds, and
job
trad
es
. The
comp
any

uses a formal communication plan for all key decisions
and develops

sound bytes


to aid clarity in deployment.
S
tandards in areas such as ergonomics,
lighting, noise, and personal protective equipment are audited monthly

to ensure workforce safety
and

security
.
M
ultiple benefits and services support EOs. The applicant systematically determines
key elements of employee engagement every three years using correlation and regression analysis
between individual EO survey questions and overall engagement and

satisfaction. These processes
support the
applicant’s
mission element to provide EOs with
a
Best Career Location
®
.

3.

Senior leaders guide and sustain the
applicant

through several systematic methods. They affirm
,

annually evaluate
,

and deploy the mission, vision, and values to EOs,
Partner Suppliers
, and
customers. Senior leaders create a sustainable organization through the leadership system; aligned
strategic objectives, core competencies, action
plans,

and measures; weekly perfor
mance reviews;
and discussions of lessons learned. They create a focus on action by cascading strategic objectives,
action plans, and scorecard measures to business segments, departments, teams, and individual
EOs
. Multiple methods are used
to communicate
with customer,
Partner Suppliers
, and the
workforce. These methods may help senior leaders develop a sustainable organization capable of
addressing
the
applicant
’s

strategic challenges.

b.

What are the most significant opportunities, concerns, or
vulnerabilit
ies identified in the applicant

s response to
p
rocess
i
tems?

1.

It is unclear how the applicant manages for innovation, which may be critical to fulfilling its vision to
lead circuitry innovation for the future. There is limited evidence of how the

applicant

creates an
environment that supports innovation, generates innovative ideas leading to strategic opportunities,
and decides which opportunities to pursue.
In addition, i
t is not evident how the

chief innovation
office
r, the Product Development and Innovat
ion Process, the Performance Excellence group, and
the Leadership Team work together systematically to manage innovation and pursue strategic
opportunities. Approaches
for
discontinu
ing the pursuit of

innovation opportunities when appropriate
are not described. It is also unclear how the applicant

s workforce
performance
management
system
reinforce
s

intelligent risk taking

in order

to achieve innovation. Without systematic approaches for
managing innov
ation, the applicant may

not

leverage its core competency of Ingenuity.

2.

Several key approaches lack evidence of systematic evaluation and improvement. For example,
leadership processes

such as
those related to
senior leader
s’

commitment to legal and ethica
l
behavior, communication with the workforce and customers, and
the
Leadership Team
’s

mentoring
and
succession
-
planning

approaches

do not appear to be routinely evaluated.
In addition, evidence
of cycles of learning
is limited
or absent for
the
applicant
’s

approaches
to

customer support and
market segmentation
and for
several workforce environment
-
related

processes, including capability

6

and capacity studies
;

the
team structure process
;

and
the
determination of workforce health, security,
and minimum standar
ds. Systematic
ally

evaluati
ng

and improv
mg

these approaches may
help the

applicant achieve its strategic objectives and meet
i
ts stakeholders


needs
.

3.

Some of the applicant

s approaches to performance projection, use of customer information, and
customer relationship building
are not evident or do not to appear to be systematic
. For example,
projections for
the applicant’s
longer
-
term planning horizon of three years

are not e
vident
.
In addition,
the applicant does not
descri
be

how
it

uses performance review findings and competitive data in
projecting
its
future performance
, and

it

does not appear to project the performance of its competitors
or comparable organizations.
Also,
systematic approach
es are not evident

for using information to
anticipate future customer groups and market segments
;

for determining which customers, customer
groups, and market segments to pursue for business growth
;

or
for marketing and building
relatio
nships
to
acquir
e

customer
s
. Additional
focus on the future i
n these areas may enhance the
applicant

s sustainability.

c.

Considering the applicant

s key business/organization factors, what
are the most significant strengths found in its response to
results
i
t
ems?

1.

Some workforce satisfaction and engagement results show progress toward the applicant’s mission
component to provide E
O
s with
a

B
est
C
areer
L
ocation.
For example, o
verall engagement

and
satisfaction

increased from 2009 to 2012,

exceeding

manufacturing industry benchmark
s
.
A
lso
reflect
ing

satisfaction and engagement levels
,

employee
retention rates rang
e

from 93% for factory
EOs to 95% for technical EOs and near
ly

100% for support EOs. Workforce climate measures also
show
beneficial

trends
for
the
key EO requirements of feeling safe and secure, taking pride in being
an owner, making a difference on the job, and having competitive wages and benefits.
In addition,
s
pecific health and safety measures
,

such as EO participation in wellness activi
ties
;

Days Away,
Restricted, or Transferred
(
DART
)

and reportable incident rates
;

near
-
miss reports
;

and hazardous,
noxious, and lead exposures
show

beneficial
trends consistent with a high
-
performance work
environment.

2.

Several customer
-
focused
results

underscore the applicant

s core competency of Expertise. Overall
customer engagement improved from 2009 through 2012, surpassing the industry benchmark for the
l
ast three years.
In Net Promoter Score, the
applicant has outperformed
its

competitor and the
industry average since 2009.
Measures of

customer satisfaction
overall

and
for
the

Aerospace and
Contract
R&D market segments demonstrate good results and
beneficial
four
-
year trends.
In addition,
key measures of customer satisfaction
that
show
good
levels

and
beneficial
trends includ
e
those
for

reliability,
higher density and lower weight

(
HDLW
)

capability, functionality, delivery, receipt quality,
and responsiveness. Customer satisfaction
results
for

the top two requirements by
business segment
show good levels and beneficial trends
in
five of six
areas
reported.


3.

Some leadership results
support the applicant’s values of
C
ommitment and Courage
. For example,
100% of employees state that they can talk openly with leaders, and 99.7% report that they

receive
frequent updates on company strategy
. These

results

are better than top
-
decile comparisons
, as
are
those for

workforce
members’
confidence that leaders are taking the company in the right direction
and
their
comfort with reporting suspected noncom
pliant behavior.
Results
for

the

achievement of
organizational strategy and action plans show
beneficial
trends, and
measures related to
two out of
three core competencies show
good
levels and

beneficial

trends. Results for fiscal accountability,
meeting/s
urpassing legal and regulatory requirements, and governance show generally beneficial
trends or sustained high levels of performance, as do environmental measures
.

These leadership
results
may help the applicant
address its strategic challenge of achieving

Level 3
Sustainability.

4.

Some financial measures support the applicant

s mission of
achieving a
superior return for EOs.
Measures of s
ales, earnings, gross margin, and return on net assets (RONA) show beneficial trends
and
exceed the
benchmarks. Total sales increased from 2009 to 2012,
as did
sales for
the A
erospace
and
Contract
R&D segments.
Other financial results showing beneficial trends and exceeding
benchmarks include
those
for

inventory turns, days outstanding
in
accounts receiv
ables, and unit cost
reduction.


7

d.

Considering the applicant

s key business/organization factors, what
are the most significant opportunities, vulnerabilities, and/or gaps
(related to data, comparisons, linkages) found in its response to
results ite
ms?

1.

Resul
ts are missing or limited
in

several areas of significance to the applicant.
For example, r
esults
are not reported for marketplace performance and growth
, which are

linked to the strategic objective
to increase market share
of A
erospace,
P
ersonal
E
lectroni
cs (PE), and
C
ontract R&D customers
,

or
for
the strategic action plans to produce prototypes and increase new contracts.
E
mergency
preparedness results are limited, as
are results

for

innovation and
for
performance relative to several
key process requirements.
N
o results
are given
for the
Career Path Management (
CPM
)

Process or
the emerging leader system

such as coaching, mentoring, or team leadership roles

or for
how well
the applicant is meeting communi
ty requirements. Implementing and monitoring measures in these
areas may help the applicant assess how well it is meeting the needs of its stakeholders and
achieving its strategic objectives.

2.

Several key
results
are not segmented by appropriate groups. So
me workforce results

such as EO
s
urvey
results, recordable injury
and DART
rate
s
, and EO strategic behavior

are not segmented by
employee group.
In addition,
results for stakeholder perceptions of leadership effectiveness
are not
segmented by employee clas
sification, customer group, or
electronic manufacturing services (
EMS
)

partner
s
. Many measures of financial and marketplace performance are not segmented by business
segment, including
measures of
inventory turns, days outstanding
in
accounts receivable, a
nd repeat
business won. Without appropriate segmentation of results, the applicant may be unable to focus on
areas

with
the greatest impact on
its
performance.

3.

The applicant does not provide comparative data for several key

results
. For example, comparison
s
are missing for

some

product and process results
,

including on
-
time receipt and receipt quality,
Contract
R&
D design for manufacturing and on
-
time delivery, customer support promptness and
accuracy, and billing accuracy and timeliness. Comparative results are
also
missing for
some
workforce
results
,

such as most EO Survey results; EO retention; participation in
wellness activities;
hazardous, noxious, and lead exposures; and EOs with certifications.
Few
comparative results are
presented for leadership and governance results. Understanding
its
performance relative to industry
and competitive benchmarks may assist
the applicant in fulfilling its value of Colossal: we are proud
of our business performance compared to others.

4.

The PE business segment shows several unfavorable results.
For e
xample
,

PE
s
ales are flat
and
are

well below those of the best competitor.
The
w
in rate for this segment shows a mixed trend and is
lower
than
that
for
the
A
erospace
and
C
ontract
R&D

segments
.
In addition,
PE customer satisfaction
,
at

77%
,

is lower than
the
satisfaction rates

for
other business segments, as well as the satisfaction
b
enchmark of 97%
.

Satisfaction

with the top two PE requirements of HDLW and pricing

is

significantly
lower than
for
the top two requirements
of
the other business segments. Improving results for the PE
segment may be critical to achieving the strategic obje
ctive of increasing PE market share by 15%.


8

Item Worksheet

Item 1.1

Senior Leadership

Relevant Key Factors

1.

Vision

Lead circuitry innovation for the future

2.

Creativity (we invest in continuous innovation);

3.

Mission

Engage customers of interconnect circuitry with the products for tomorrow;

4.

Values

Commitment
(we deliver on our promises; living our values through integrity, trust, and respect)

5.

Core
c
ompetencies

Ingenuity:

leading advancements in the industry, especial
ly in the areas of
engineering and R&D;
Expertise
:

understanding our customer

s business and exceeding expectations
through robust operational processes; Exceptional People: building lasting relationships with all
customers and stakeholders through the Per
sonal Touch.

6.

425 employees; F 51% and M 49%
;

employee group
s
: 28% technical, 54% factory, 18% support;
diversity: 64% white (v
s. 74% community), 19% African American (vs. 15% community), 10% Hispanic
(vs. 6% community), 7% other (vs. 5% community)
;
ed
ucati
on: BA/BS + (
engineers & supervisors),
associates (technician
s), HS/GED + (
a
ll)

7.

Aerospace (national)

cockpit and navigation instrumentation, flight control modules; major customer

exclusive contract with GBN Corp.
;
PE

(international)

cell and satellite
phones, tablets and
microcomputers, cameras, toys; major customers

NexTee, MEE2, Sleeker
;
Contract R&D (national)

circuitry design assistance, development of fine
-
line imagery, production processes; major customers

Valley Tech and Newton Computers

8.

SA
-
3 Per
sonal Touch
;
SA
-
4 Intelligent Risk

Strengths

++

Strength

Rationale

Item Ref.


The applicant
’s

systematic process to
affirm

the mission, vision, and values;

deploy
them
to stakeholders
;

and revise

them

if necessary support
s

its core
competency of Exceptional People
.

The
mission,
vision,

and values are evaluated
annually. In addition, Partner Suppliers
attend

Collin Is Committed


sessions
;

the
orientation for
new hires introduce
s them

to
the mission, vision, and values;

and
CCAs deploy
the
m

to customers.

All team members listed this as a strength. More than half
listed this as the top strength.

Leadership system (
Figure
1.1
-
1) affirms and
communicates MVV.

Other deployment of MVV through communication
mechanisms (
Figure

1.1
-
2) and through new EO orientation,
to partners through

Collins
Is Committed


sessions and
supplier contracts, sound byte messages, CCAs deploy to
customers, also deployed through collective LT behavior.

Originally set in 1995. Subsequent refinement
through the
SPP. Vision refined in 2001. Mission revised in 2009 to
align with commitment to societal responsibility and
sustainability.

a(1)


In support of the strategic advantage of
EOs enjoying
a
B
est
C
areer
L
ocation,
s
enior leaders systematically
communicate with and engage
EO
s and
customers (Figure
s

1.1
-
1

and 1.1
-
2
)
.

Methods include

electronic and social

media and
Leadership Team (
LT
)

walk
-
arounds. Based on EO feedback,
the
applicant uses
a formal communication
plan fo
r all key decisions
,

and

sound
byte


messages
aid clarity in deployment.

All
team members

listed this observation as a strength. Half
of the team listed it as their #1 or #2 strength.

Formal communication plan is developed for deploying
information
related to key decisions. This was done as a
result of EO feedback.

Figure 1.1
-
2 lists methods of communication;
many

of which
target EOs and customers. At least one method of
communication per audience enables two
-
way
communication.

Social media handled t
hrough industrywide Q&A, added in
b(1)


9

++

Strength

Rationale

Item Ref.

2012.

Communication with EOs: handwritten notes, LT members
spend 1 hour each day in walk
-
arounds with EOs and
deploy

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潮ly⁡ 摲敳s
瑨ts攠e睯⁳瑡t敨潬摥rs⸠䤠d敢慴敤湬y⁡摤r敳sin朠ghe
睯wkf潲o攠e散慵s攠e⁴ 潵g桴h瑨潳攠牥e灯湳敳 w敲攠etr潮来r
慮搠敭灨慳ize搬db畴uc畳瑯m敲s⁡牥⁣潶敲敤⁡ well.


Multiple sustainability
-
enhancing
approaches support
the provision of a
B
est
C
areer
L
ocation and
a
superior
return

to EOs
.
These include a leadership
system that maps responsibilities to the
Plan, Do, Check, Act (
PDCA
)

cycle and
integrates with the
strategic planning
proce
ss (
SPP
)
; aligned strategic
objectiv
es, core competencies, action
plans
,

and measures; discussi
o
n
of
lessons learned in meetings
;

and
development processes for the
Advisory
Board (
AB
)
, the LT, and emerging
leaders.

Four team members
listed sustainable organization as a
strength.
Two

listed this as a strength but grouped it with a
focus on action. I

m⁰牯灯si湧⁴ 敥瀠p桯s攠tw漠oplit⸠q桩s
睩ll⁧iv攠es⁢整e敲e扡l慮c攠扥twe敮⁴桥⁣潭m敮瑳⁴ ⁲敦l散琠
瑨t⁳c潲攮oB畴u慮 慲杵a敮琠t潵ld⁥ sily⁢ 慤攠e漠or潵瀠
瑨t⁴睯⁣潭m敮瑳⁴ 来瑨tr⁳in
c攠eh攠e灰lic慮t

s⁲敳灯湳攠
睡w⁳imil慲⁴漠a潴o.

q桥⁌ 慤敲e桩瀠pyst敭⁩湴n杲慴g搠睩瑨tp瑲慴敧ic ml慮湩n本g
睩瑨tm敡s畲慢u攠pls⁡ i杮敤 睩瑨tC䍳ⰠIssⰠI瑲a瑥tic
c桡ll敮g敳ⰠIn搠d摶慮t慧es⸠.c瑩o渠nl慮s⁡湤敡s畲敳
c慳c慤敤⁴ r潵g栠h畳i湥ss⁳敧m敮瑳ⰠI数慲a
m敮瑳ⰠI湤
瑥tms⁴ ⁅ls.

䵯湴桬y⁰敲e潲m慮c攠牥eiews
r敦i湥m敮琠瑯 煵慲a敲ey
r敶iewsF敡s畲攠灥rf潲ma湣攠eg慩湳琠灲潪散瑩o湳Ⱐ
敮慢li湧 慧ility.

q桥⁌ ⁩s⁨ l搠慣c潵湴n扬e⁦潲⁰敲o潮慬 瑲慩湩n朻g
敳瑡tlis桩湧 愠牥a慴a潮shi瀠睩瑨t敡c栠h畳瑯t敲㬠e潲o
m敮瑯物n
朠g琠le慳琠tn攠em敲杩湧 le慤敲e

䍃䅳⁡ sig湥d⁴ ⁣畳瑯t敲e⁴ ⁤ v敬潰⁲el慴io湳桩灳Ⱐ
慤摲敳s⁩ss略sⰠ慮搠灲潭潴o⁲整e湴n潮.

愨㌩


S
upporting
the
applicant
’s
val略 潦
c
ommitm敮t
I

s敮i潲ol敡摥rs⁣r敡瑥t愠
f潣畳 ⁡ 瑩o渠
瑨牯畧h⁳瑲慴agic
潢j散瑩v敳ⰠIcti潮 灬慮sⰠIn搠dc潲散慲搠
m敡s畲敳
瑨t琠tr攠
c慳c慤e搠d漠扵sin敳s
s敧m敮瑳ⰠI数慲瑭敮瑳Ⱐ瑥慭sⰠI湤
i湤ivid畡l⁅ls⸠
l渠
愠a潮瑨ty⁲eview
sc桥摵l攠⡆ig畲攠ㄮN
J

I

cus瑯t敲Ⱐ
潰敲慴io湳ⰠIi湡湣i慬
I

慮搠睯wkf潲o攠
灥rf潲m慮ce
;

s瑲慴agy⁥ 散畴uon
;

a湤⁴桥
l敡摥rs桩瀠pys瑥t⁡牥⁡ alyze搠d潲o
c潲o散瑩v攠慣瑩o湳⁡ 搠dm灲潶敭敮琠
潰灯rt畮i瑩敳.

q桲敥⁴h慭 mem扥rs

lis瑥t⁴ is⁦潣畳 慣瑩o渠ns⁡
s瑲敮杴g⸠
qwo

杲g異敤⁴桩s 睩瑨t
瑨t⁣潭m敮琠
s畳瑡tna扬攠
潲条oiz慴a潮 摵攠瑯tsimil慲楴i敳⁩
渠nh攠ep灬ic慮t

s⁲敳灯湳敳⸠
f

m k敥灩湧⁴桥⁴睯⁣潭me湴n⁳数慲慴攠e漠杩ve⁴ e
comm敮琠t慬a湣攠e整e敲⁲el慴ao渠no⁴ e⁳c潲攬⁢ot⁴ 敳攠
mi杨琠t攠e潭扩湥d

愨㌩ 睩瑨t戨㈩.

p瑲慴a杩c扪散瑩v敳ⰠIcti潮 灬a湳ⰠIn搠dc潲散慲搠a敡s畲敳
c慳c慤敤⁴ ⁢ si湥ss⁳敧m敮t
sⰠI数慲瑭敮瑳Ⱐ瑥慭sⰠI湤
i湤ivid畡l
bls

All⁌ em扥rs s灥湤⁡ e慳琠t湥⁨ 畲⁡⁤ay in⁰牯 uc瑩潮
潲⁲敳敡rc栠hr敡s

All⁅ls⁳灥湤 慴al敡s琠t湥 摡y 愠a潮瑨t慳sis瑩湧 慮 bl⁡
桩s⽨Lrob

䍃䅳⁳桡r攠e畳t潭敲ef敥摢慣k⁷i瑨
bls

瑯t敮h慮c攠䑏
畮摥rs瑡湤i湧 o
f⁣畳瑯t敲e湥敤s

䵥慳畲敭敮琠tys瑥t⁡ 搠m潮瑨ty⁰敲e潲m慮c攠牥eiews
灲潶i摥 摡t愠ao⁥ 慢l攠ecti潮

䵯湴桬y⁳c桥d畬攠ef⁌ ⁲敶iews
ci杵r攠ㄮN
J


p瑡t摩湧 慧e湤愠i瑥t⁩s⁨ w 慣瑩o湳⁡ f散琠t瑨tr
s瑡t敨潬摥rs

戨㈩


10

++

Strength

Rationale

Item Ref.

Stakeholder teams assigned to represent interests
of each
stakeholder group (Figure 1.1
-
4)


Notes

Postcall revisions:

Strength a(3)

language on “cascaded to each EO” removed to differentiate the comment from the b(2) strength.

p瑲敮杴g 戨㈩

”So what” changed to eliminate reference to innovation
(which is an OFI). Didn’t want to send a mixed
mess慧攮

剥oisio湳⁩渠sPW

p瑲敮杴g 愨ㄩ

”So what” moved to first sentence.

p瑲敮杴g 戨ㄩ

Merged first and second sentences. Changed the “so what” because it had the same one as the prior
comm敮琮

p瑲敮杴g
愨㌩

剥o潶敤⁲敦敲敮e攠e漠o潮瑨ty⁌ ⁰ rf潲o慮c攠牥eiews⁴漠oiff敲e湴na瑥tt桥⁣潭m敮琠trom⁴ 攠eE㈩O
comment. (May also want to remove the reference to “cascading” for complete differentiation, but this was important to
扯瑨tc潭m敮瑳⸠.桥⁴ 慭⁩s⁳灬i琠潮 w
hether to combine these 2 comments. Good arguments on both sides. I’m slightly
i渠n慶潲o敥灩湧⁴桥m⁡ 慲琠扥a慵se⁳潭攠ef⁴ 攠ex慭灬敳⁡牥⁤ ff敲敮琠e潲⁢潴栮h

p瑲敮杴g 戨㈩

ji湯r 敤i瑩n朮

剥oisio湳⁩渠sOW

乥敤 潴o敲e⁴ weig栠h渠nn com扩湩湧⁡⠳ 睩th

戨㈩⸠
l湥⁴ 慭 mem扥r

is⁩渠n異p潲琮⁉⁡m⁳i瑴tn朠gn⁴ e⁦敮c攮el瑨tr
敤i瑳慤攠e潲⁣l慲楴y.

乯瑥s⁦r潭⁖ㄺ

q桥r攠e慳 潮ly 潮攠潴o敲⁳瑲敮杴g t敤 by 瑥tm mem扥rs⁩渠n刺敧慬 慮搠整eic慬⁢ h慶i潲
a
x
O

m敮瑩潮敤 by
t桲敥

瑥tm mem扥rs
⸠q桥y 瑥t摥搠d漠牡湫⁴ is⁣潭m敮琠ts⁡ lo睥w⁩m灯r瑡tc攮eq桩s⁳tr敮杴g is⁡ls漠o渠n潮flic琠睩t栠h敶敲慬
team members who say this as an OFI. My approach to this one is NOT to include it as either a strength or an OFI. We’ll
s瑡t搠d畴u i琮t


Opportunit
ies for Improvement



Opportunity for Improvement

Rationale

Item Ref.

X

Beyond the LT’s
embrac
ing

the shift to
continuous improvement and continuous
innovation, the approach used to create
an
environment

for and enable innovation and
intelligent risk taking

is not evident.
In
addition,
it
is not
clear how

the monthly LT
performance reviews support

innovation
and intelligent risk taking.

A systematic
approach in this area

may support the
applicant

s value of
Creativity


we invest
in continuous innovation.


Five
team members

listed this OFI. Four rated it as

a
#1 or
#2 priority for the applicant.

There is no evidence of a systematic process supporting
innovation although the
applicant mentions


embra
cing


it
several times.


The conscious shift to continual improvement and
continuous innovation (CI
2
) was embraced by the LT as a
means to reinforce an environment for innovation and
intelligent risk taking.



Monthly performance reviews, initiated in 201
0 as a
refinement to the quarterly reviews, are conducted to
determine current progress compared to projected
performance. But there is no indication of how innovation is
used to improve processes.

a(3),

b(2)


11



Opportunity for Improvement

Rationale

Item Ref.


Some
leadership
approaches

s畣栠hs
慰灲p慣桥s⁵ 敤⁴ 摥m潮s瑲慴a

commitm敮琠瑯e条l⁡湤⁥t桩c慬⁢ 桡vi潲o
瑨ts攠ese搠do⁣潭m畮ic慴a⁷ 瑨⁴ e
睯wkf潲o攠e湤⁣畳瑯t敲eⰠ慮搠
t桯s攠畳敤
f潲o
䱔 m敮瑯物湧⁡ 搠d畣c敳si潮

灬a湮i湧

摯 湯琠慰p敡r⁴ ⁢
syst敭慴ac慬ly⁥val畡瑥t 潲⁩m灲潶敤⸠
pys瑥t慴ac慬ly⁥ 慭i湩n朠g桥s攠
慰灲p慣桥s⁦潲⁩m灲潶敭e湴n潰灯r瑵湩ti敳
m慹⁨ l瀠p桥 慰plica湴ns畳t慩渠
i瑳⁣潲攠
com灥瑥tci敳 ⁢ ildi湧 las瑩湧
r敬慴i潮shi灳Ⱐl敡摩湧⁡dva湣敭敮瑳⁩渠n桥
i湤畳瑲yⰠ
a湤 畮d敲e瑡tdin朠g桥
c畳瑯t敲

s⁢ si湥ss.

c潵r
瑥tm mem扥rs

桡搠d潭m敮瑳⁡ 潵琠te慲湩湧 慮搠
cycl敳 ⁩m灲潶敭敮琮t
ln攠
c潭m敮琠t慳⁳灥cific⁴
畳i湧 two
J
way⁣潭m畮ic慴a潮⁴ ⁩m灲潶攻et桥 潴o敲e 睥w攠
扲潡b敲⸠ew漠
t敡m mem扥rs

r慴a搠dhis⁡ ⁴ 攠eN⁏c䤻f瑨t
潴o敲⁴睯⁲慴敤 i琠ts‣㈮

䱩mi瑥t⁥ 慭灬敳⁡牥 灲潶i摥搠潦⁴ 攠e敡d敲e桩p⁳ys瑥m
扥i湧⁥valu慴a搠dn搠dm灲潶敤v敲⁴em攮

啮rl敡r 桯w⁣ycl敳 敡rni湧 潣c畲⁦潲㨠

A灰ro慣桥s⁵ e搠dy⁳敮i潲敡摥rs⁴ 摥m潮s瑲慴a⁴ eir
commitm敮琠瑯e条l⁡湤⁥t桩c慬⁢ 桡v
i潲o

A灰ro慣桥s⁵ e搠dy⁳敮i潲敡摥rs⁴ ⁣潭m畮ic慴a 睩瑨t
瑨t 睯wkf潲o攠e湤⁣畳瑯t敲e

䱔 m敮瑯物湧 潲⁳畣c敳si潮⁰ 慮nin朠gp灲潡ph敳.

c潲⁥o慭灬攬e慬t桯畧栠visio渠nn搠d慬略s⁡牥 敶慬畡瑥d
慮湵慬ly in⁴ e⁓mmⰠIt

s⁵ cl敡r⁨ 眠瑨慴a潣c畲u.

Als漬o慬t桯u杨

瑨t潮瑨ly r敶iew⁰牯 敳s

cig畲攠
N⸱
J
㌩P
睡w⁣桡湧敤 慳⁡ 潵瑣潭攠ef⁡ 灲潣敳s⁩m灲潶敭敮琠
灲潪散琠t渠㈰N〬Mit

s⁵湣le慲a桯w⁴桡琠灲潣敳s⁷慳⁩d敮tifi敤
慳⁡ im灲潶敭敮琠t慮摩d慴a.



b


It is unclear how senior leaders create a
focus on creating and balancing value for
stakeholders. For example, the LT review
schedule
(Figure 1.1
-
3)
does not include
subjects that
affect
such
stakeholders as
the community and
Partner Suppliers
. And
beyond
allowing for

the
rotation of
stakeholder
team members,
it is unclear
how
senior leaders
ensure that
actions
developed by

these
teams

balance the
needs of other stakeholders. This may
result in conflicts or missed opportunities
for

action plans that benefit

multiple
stakeholders.

Three team members

listed this comment as an OFI. I


i湣lu摩湧⁴桩s⁢散慵s攠e桥 慰plic慮琠t慳⁳畣栠摩sp
慲慴e

s瑡t敨潬摥r⁧牯異s.

䥮fcig畲攠u⸱
J
P
I

t桥 䱔⁲敶iew⁳c桥摵l攠摯敳 湯琠i湣lu摥
s畢j散瑳⁴ 慴a
慦f散t

潴o敲⁳t慫敨潬摥rs⁳畣栠
慳⁴桥
comm畮ity⁡湤
m慲瑮敲⁓u灰li敲e
.

A灡r琠tr潭⁡ s瑡t摩n朠g来n摡ⁱ略s瑩潮⁡琠瑨攠en搠df⁥慣栠
r敶iew⁲敧慲摩湧 慢ility 瑯tm敥琠瑨攠e敥摳  h敲e
s瑡t敨潬摥rsⰠI⁳ys瑥t慴ac⁡ 灲p慣栠hs潴oevi摥湴n

ci杵r攠ㄮN
J
㐠4桯ws⁴ 慴aeac栠hem扥rf⁴ 攠eq⁩s
慳si杮
e搠d漠愠a瑡t敨潬摥r⁢畴ui琠is⁵湣l敡r 桯w 瑨ts 敮s畲敳
瑨t琠t桥
湥e摳 ⁥ c栠h瑡t敨ol摥r 慲a

慤摲敳s敤.

p瑡t敨潬摥r⁴ 慭s⁥ is琠t湤⁲潴ot攠ev敲y‱ 潮瑨t⁢ 琠t琠
is⁵ cl敡r⁨ow⁴ 攠erg慮iza瑩潮⁥ s畲敳⁴桡琠t桥 慣瑩ons
摥v敬潰e搠dy⁴ 攠ee慭s⁢ l慮c攠eh攠e
敥摳 ⁴ 攠et桥r
s瑡t敨潬摥rs⸠
q桩s⁣潵l搠牥s畬琠t渠n潳si扬攠e潮flic瑳⁡n搯dr
miss敤 p潲瑵oi瑩敳⁴ 桡v攠e桡r敤 慣瑩潮⁰la湳⁴ 慴
扥湥fi琠t畬瑩灬攠e瑡t敨潬d敲s.

戨㈩


Notes

Postcall revisions:

OFI a(3), b(2)

This comment remained doubled.

OFI b(2)

This

comment will remain.

Revisions for V3:

OFI a(3), b(2)

Doubling this one because this is an industry where innovation and risk taking can be critical to
sustainability. Let’s discuss on the call.


12

OFI a, b

䵩湯r⁥摩琠t潲⁣larity.

lc䤠fE㈩

pi杮ific慮琠iss略
瑯tdisc畳s ⁴ e⁣慬l⸠.wo
瑥tm mem扥rs

s畧来s琠牥t潶i湧⁴ is⁏c䤮⁔桥y 桡ve⁡ 灯i湴
si湣攠eh攠ep灬ic慮琠t敮瑩潮s⁳瑡t敨潬摥r⁲eviews 慴am潮瑨ly 䱔⁳敳si潮sⰠI⁳瑡湤i湧 慧e湤aⁱ 敳瑩o測na湤 assi杮in朠
s瑡t敨潬摥r⁴敡ms⁡ ⁡ 灲潡p桥s⁴ ⁣r敡瑩湧 慮搠扡l慮ci
n朠g慬略⁦潲⁣畳瑯t敲e 慮搠d瑡t敨ol摥rs⸠.渠瑨t o瑨tr⁨ 湤Ⱐ
潴o敲e
t敡m mem扥rs

saw some things (see the comment for specifics) that raised questions. I’m keeping this comment
f潲潷 扥ca畳攠e 睡湴⁴漠o畤来⁴ e⁡ 灬ic慮琠t漠osk⁴ 敭s敬v敳 扡s敤 潮⁴桥 數am
灬敳⁷攠杩v攠睨整桥r⁩琠牥慬ly⁣r敡t攠
慮搠扡l慮c攠e瑡t敨ol摥r a湤⁣畳瑯t敲⁶慬略⸠.ltim慴alyⰠ瑨攠e灰lic慮t will 桡v攠t漠o散i摥⁦潲⁩瑳elf.

剥oisio湳⁦潲⁖oW

tor摩湧⁣桡n来s慤攠e潲⁣l慲楴y⁢慳敤 潮⁦敥d扡ck⁦牯
潮攠瑥慭 mem扥b

潮⁡⠳ ⰠIE㈩㬠O湤 戨㈩⁣o
mme湴n⸠.e攠e敲e
f敥摢慣k 瑥t⁦潲⁤整oils.

乯瑥s⁦潲⁖oW

q桥r攠e慳 l敳s⁣潮s敮s畳 f潲⁴桥olc䥳⁴ 慮 瑨tre w慳⁦潲⁴桥os瑲敮杴桳⁩n⁴ is⁩瑥m.

q桥⁦irs琠牡tk敤⁏cf

in湯v慴i潮⁡ 搠d湴nlli来湴nrisk

s敥m敤⁴ 敲楴⁩瑳⁲慮ki湧⸠.n搠dh攠e散潮d 攠⡡el慣kf⁣ycl敳 潦
im灲潶敭敮琩 m敲楴敤⁩瑳⁲a湫i湧⸠.u琠瑨敲攠es潲攠o潯m f潲⁤敢慴a 慦瑥爠瑨t琮
q
桥⁴ ir搠⡡d搠di湡lF⁏c䤠⡣r敡瑩湧⁡ 搠
扡l慮cin朠v慬u
攩敲楴敤 incl畳i潮⁢ ca畳攠ef⁴ 攠摩spiri琠t瑡t敨ol摥rs⁳敲e敤⁢y⁴桥⁡灰lic慮t⸠乯眠w潲⁴桥olc䥳⁦rom⁉删
that didn’t make the cut:

Perhaps most debatable was “unclear

⸮.

legal and ethical behavior,” mentioned by

t敡m mem扥rs
⸠qw漠of 瑨ts攠牡e敤
瑨ts
瑨敩r⁨ig桥s琠tc䤮⁉敦琠t桩s⁏c䤠fff⁴ 攠eis琠t散a畳攠慮⁥煵al畭扥r
瑥tm 浥m扥rs

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l湥
瑥慭 mem扥r

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c潮sis瑥ttly.
She may have a point, but “sustainable organization” is a strength and we’re fresh out of our “about 6”
comm敮瑳⸠
q
桩s 攠
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l湥
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J
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畳瑯t敲e⁶i愠s潣i慬
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Finally,
one team member

had an OFI about lack of senior leaders communicating with customers. I have to
admit this
seemed relevant

at the time, but others ha
ve pointed out that Figure 1.1
-
2 had many communication
mechanisms for customers. So I bend to the logic of the group and leave this OFI comment off the list.

Scoring

Score Range:
50
-
65%

Score Value:
6
0

Why shouldn’t the score be in the range above or below the selected one?

Approach

50
-
65

Responsive to the overall requirements EXCEPT for innovation. I suppose approach could
be scored at 30
-
45 because of this, but I would argue it would be at 49.9 as the

very worst.

Deployment

50
-
65

Frankly, not much on deployment worked its way through to the comments. But the
evidence supported “well
-
deployed” approaches.

Learning

50
-
65, but just barely above 30
-
45

learning
was evident for some approaches, but several m
ajor
ones weren’t mentioned.

Alignment

solidly 50
-
65

Responsive to customers and EOs (two key stakeholders), and strength comments
on sustainability and a focus on action.



13

Item Worksheet

Item 1.2

Governance and Societal Responsibilities

Relevant Key
Factors

1.

Provide EOs with a Best Career Location® and superior

return; sustain society and the environment;
enhance our comm
unities.

2.

Commitment
:
we deliver on our promises; living our values through integrity, trust, and respect)

3.

Exceptional People: buildin
g lasting relationships with all customers and stakeholders through the
Personal Touch.

4.

Complies with state and national OSHA requirements, U.S. Department of Labor laws, General
Accounting Practices, and guidelines of Sarbanes
-
Oxley

5.

Independent AB led by
company founder and Chairman of the Board; trustees appointed to represent EO
interests in AB

s fiduciary review of the ESOP. CEO reports directly to the executive committee of the
board. Senior leaders report to the CEO; managers report to senior leaders.

All other EOs report to
either
senior leaders or managers.
The LT comprises senior leaders.

6.

Community: provide secure employment opportunities, steward of air and water quality, partner in
business community (i.e. provide leadership in civic
organizations, support community development
activities)

7.

SC
-
5 Engaging EOs in sustainability
;
SC
-
6 Leadership development

Strengths

++

Strength

Rationale

Item Ref.


The applicant
’s

use

of

teams to address
potential adverse impacts on society
(Figure 1.2
-
1)

reflect
s

the

mission to
sustain society and the environment and
efforts to build lasting relationships with all
customers and stakeholders
. For example,
the Public Health
T
eam work
s

with

the
Occupational Safety and Health
Administration (
OSHA
)

and community
-
based

public health organizations and
conduct
s

audits related to health

or
safety
risks. The Environmental Improvement
Team
focuses on eliminating lead from
production processes and re
ducing the
use of noxious chemicals.

Six team members listed this observation as a strength.

Relevance

Part of the mission “
to sustain society and the
environment and enhance our communities.


+ Risk

Management Teams identify potential exposures,
define/refine control practices, establish measures, set
stretch targets related to regulatory behaviors

+ Figure 1.2
-
1 identifies potential risks, practices, measures
and targets for public health, environmental improvement,
waste management, energy conse
rvation risk management
areas

+ Public Health team chartered to work with OSHA and
community public health organizations; also do audits
related to health/safety risks

+ Environmental Improvement Team responsible for
environmental stewardship

+
Achievements include decrease in solid waste from
manufacturing operations and unpleasant odor removal by
development of class 1 microfilter

+ Energy Conservation Team

b(1)


Senior leaders


performance is
systematically evaluated with the annual
360
-
degre
e CPM
Process
,

addressing
the
strategic challenge of leadership
development.

T
ogether with EO
Survey
Five team members comment
ed on the performance
evaluation system. Two of them rated it as the #1 strength
in this item.

Relevance

Strategic challenge of leadership development.

a(2
)


14

++

Strength

Rationale

Item Ref.

responses,
results
are analyzed to
determine areas of individual leader
development and

improvement
opportunities

for the
leadership system
,

which are discussed quarterly. The
AB
evaluates the
chief executive officer
(
CEO
)

and determines his compensation
based on company performance,
management accountability, individual
leadership performance, and customer
feedback.


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A
pproaches to promot
ing

ethical behavior
in all
EO
interactions support the
applicant

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戨㈩


Notes

Postcall revisions:

Strength a(1)

Deleted so it would not conflict with the a(1) OFI.
T
he OFI was the more important message.

Revisions in V3:

Strength b(1)

No changes

Strength a(1)

Two
team members

pointed out that the strength comment and OFI comment for a(1) are different
only by a nuance. One suggested keeping the strength; the other suggested keeping the OFI. I’m keeping both. In
the strength, we’re giving the appli
cant credit for answering “what” its governance system improvements have been.
In the OFI, we’re suggesting that those improvement opportunities were not identified systematically. It’s unclear
“how” the applicant goes about improving its governance system
. (And the monthly review schedule in Figure 1.1
-
3
doesn’t tell me enough about “how.”)
T
he applicant needs to see this nuance. The applicant can decide if it improves
governance systematically or not. And make revisions in future applications to clean off

the OFI. If I have to pick one
over the other, I would choose to keep the OFI.

Revisions in V2:


15

Wording tweaks to a(2) for readability.

Notes for V1:

The first strength comment

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senior leaders’ performance evaluation

was ranked ahead of #3 and #4 because it didn’t
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b敩n朠g湤⁴桥
comm畮ity⁳畲vey⸠
q
hese observations were too much in conflict with the team’s #1 OFI comment. But the applicant
睩ll⁵湤敲e瑡
nd that we’ve acknowledged its efforts in this area, because the OFI will
r敦敲敮e攠e桥⁦潵r⁡牥as

comm畮ity⁳異灯rt
.



Opportunities for Improvement



Opportunity for Improvement

Rationale

Item Ref.


It is unclear
how
the applicant
systematically addresses community
support. For example, it is unclear how
key communities are identified, how the
four areas
of support
leverage the core
competencies
,

and

how the various
teams systematically determine how to
contribute to c
ommunity support.

This
may compromise

the applicant’s

ability to
s
ustain society and the environment

and
to

e
nhance
its

communities
.

Seven team members
identified this observation as an
OFI. Three had it rated #1 and two of us had it rated at #2.
In his co
mment
, the other team member
also remarked
about EOs participation. He

s right, but we

re going to
emphasize a bigger point here.

Relevance

Mission:

Sustain society and the
environment; and Enhance our communities.


For example, although community support is provided in
four areas, it is unclear what the key communities are,
how they are identified, and how
the applicant leverages

the core competencies.

It

s also unclear how the various teams systematically
determine
how to contribute to community support. The
applicant mostly provided anecdotes of support.

Relevance

A more systematic approach to community
support may allow the applicant to have more success in
achieving its mission:

Sustain society and the
environmen
t; and Enhance our communities.


c(2)


Systematic
approaches to governance
are

not evident
. For example, it is not
apparent how
the executive committee
accomplishes succession planning for
leaders
or

how

decisions
on the
composition of the AB
are made.
It

is
also

unclear how
the applicant identified,
prioritized, and chose
improvement
s to
the governance system
. Systematic
approaches
in this area
may

help

sustain

the applicant’s

core competency of
Three

team members

have

this observation. Two of those
had this as the #1 observation. These
team members

listed numerous examples of where

how


was lacking in
the responses.

Numerous examples of what
the applicant

do, but not how
the applicant

do it

Wee
kly LT reviews roll up to monthly Board Report but no
explanation of how AB utilizes this rolled up report

this is
an activity, not a process

a(1)


16



Opportunity for Improvement

Rationale

Item Ref.

exceeding expectations through robust
operational processes.

E
xamples are provided of improvements to the
governance system,
but
it

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戨㈩


Notes

Postcall revisions:

OFI a(1)

On the call we agreed to remove the example of the board report and add the concept of “governance
approaches are not integrated.” Reviewing the comment further, I couldn’t figure out
how to modify the comment to add
an “integration” flavor. However, the additional examples for this
comment support a very straight
forward “lack of
systematic approaches to governance” focus to the comment.

Revisions for V3:

OFI c(2)

Moved “so what” to inc
lude it in the first sentence.

OFI a(1)

Three
team members

pointed out that the strength comment and OFI comment for a(1) are different only by a

17

nuance. Two suggested keeping the strength; the other suggested keeping the OFI. I’m keeping both. In the stre
湧瑨Ⱐ
we’re giving the applicant credit for answering “what” its governance system improvements have been. In the OFI, we’re
suggesting that those improvement opportunities were not identified systematically. It’s unclear “how” the applicant goes
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J
3 doesn’t tell me enough about
“how.”)
q
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畮cl敡r⁨ow comm畮ity⁳異灯r琠
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relevant given the emphasis of community in the applicant’s mission.

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wh整e敲e慰灲p慣桥s⁴ 瑨t 杯v敲ea湣攠eys瑥t⁡牥⁳yst敭慴ac

recognizes the applicant’s response

rgely described a series of “what” answers. The “how” was missing. We acknowledged the “whats” developed over time
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f
t is important for the applicant to see that a “what” answer would get


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strength focused on the applicant’s efforts to ensure ethics with efforts targeting employees. Just wanted
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l
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l湥⁴ 慭 mem扥r

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r敦敲敮e攠e漠o m䑃AF⁡ 搠derf潲m慮c攠
敶alu慴a潮
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comm畮ity⁳異灯r琮tAn搠dh敳
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we’re covered here.

l湥⁴ 慭 mem扥r

桡搠d⁳灥cific⁣潭m敮琠t扯畴u瑨攠e慣kf⁣l慲楴y 潮⁨ow⁴桥⁉pl′ 〰〠Mu
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J
being (c[1]). He’s right, but the focus was too narrow compared to the other
comm敮瑳.

䥮fs散瑩o渠nE㈩Ⱐ
潮e⁴ 慭 m敭扥r

桡搠d渠潢s敲v慴i潮 慢潵琠to⁥vid敮c攠潦⁥ alu慴an朠gBem扥r⁰ rf潲ma
nce. Didn’t
i湣lu摥⁴桩s⁢散慵s攠e桥 慰灬ica湴ni湤ic慴a搠dt


灲p灡ri湧 瑯td漠ohisⰠI湤 i瑳⁦潣畳⁩s⁲敬慴ively 湡rrow⁣潭灡r敤⁴  h敲e
comm敮瑳⸠.ls漠o渠nE㈩O
潮攠e敡m mem扥r

observed that it’s unclear how info collected from the 360s is used to identif

im灲潶敭敮琠t灰潲瑵湩瑩敳.
q
桩s s敲e慴io渠w慳⁴潯慲a潷⁣潭灡r敤⁴  桥r⁣omm敮瑳.

䥮fs散瑩o渠nEㄩⰠ
潮e⁴ 慭 m敭扥r

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慮搠慮tici灡瑥t 灵扬ic⁣潮c敲湳⸠
e
e’s essentially s
aying, “I know the applicant told us it had several teams to do this, but it
didn’t tell us HOW those teams did their work.”
q
桩s⁷慳⁡ fr敱略湴⁴ o畧桴h潦i湥⁡ ⁉⁲ vie睥搠m慮y⁰慲as ⁴ 攠
慰plic慴i潮⸠䤠睩s栠hh攠e灰lic慮琠ta搠div敮 畳潲攮⁂u琠t渠n桩

c慳攬

瑨t⁴ 慭⁳慷⁥湯畧栠瑯tgiv攠e⁳瑲敮杴栠潮
addressing adverse impacts. Regarding anticipating public concerns, there is a survey that’s done. So that’s at least
som整ein朮

Als漠i渠n散ti潮⁢⠱ Ⱐ
o湥⁴e慭 mem扥r

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J
㈬Os畣栠hs
i湪畲楥s 慮搠d潭灬i慮c攠睩t栠h慲扡n敳
J
Oxley. While this is true, it’s small potatoes compared to other comments.


Scoring

Score Range:
5
0
-
6
5%

Score Value:
5
0

Why shouldn’t the score be in the range above or below th
e selected one?
Postcall revisions: None.

Revisions for V3:

Q
uestion here
wa
s whether
to
land on 45 or 50%

a

close call
, with

some

saying that the OFI on systematic
governance and community support keeps the approaches at the basic Criteria level
and keeps

us from the 50%
range while

others argue for a 50% score.

V1:


18

I struggled with scoring for this one. We could reasonably land anywhere from 40 to 60 depending on how we
account for

the applicant giving “what” answers to several key

questions; with us aski
ng for “h
ow


in several
OFIs.

Proposing 50, but I could be easily swayed higher or lower. Some support:

Approach

If we accept some “what” responses for strengths, as is proposed, I will place them at 50
-
65.

Deployment

50
-
65. The main gap was in the deploym
ent of ethics broader than just EOs.

Learning

30
-
45. The applicant cited examples of improvement, but we were not convinced that the
learning/improvement process was systematic.



19

Item Worksheet

Item 2.1

Strategy Development

Relevant Key Factors

1.

Vision

Lead circuitry innovation for the future

2.

Ingenuity
:

leading advancements in the industry, especially in the areas of engineering and R&D;
Expertise
:

understanding our customer

s business and exceeding expectations through robust operational
processes;
Exceptional People: building lasting relationships with all customers and stakeholders through
the Personal Touch.

3.

Independent AB led by company founder and Chairman of the Board; trustees appointed to represent EO
interests in AB

s fiduciary review of the

ESOP. CEO reports directly to the executive committee of the
board. Senior leaders report to the CEO; managers report to senior leaders. All other EOs report to
either
senior leaders or managers.
The

LT comprises senior leaders.

4.

SA
-
1 Busi
ness repu
tation
;
SA
-
2 Responsiveness
;
SA
-
3 Personal Touch
;
SA
-
4 Int
elligent r
isk
;
SA
-
5
Capab
le proc
esses
;
SA
-
6 Level 2 Sustainability
;
SA
-
7
EOs

that hold certifications for competencies
related to their work and enjoy Best Career Location® and ESOP

5.

SC
-
1 Industry growth by
acquisition
;
SC
-
2 Expanding customer R&D services
;
SC
-
3 HDLW
;
SC
-
4 Level 3
Sustainability
;
SC
-
5 Engaging EOs in sustainability
;
SC
-
6 Leadership development

6.

SO
-
1 Increase Net Promoter Score
;
SO
-
2 Increase current market share over the next three years by
bu
siness segment
;
SO
-
3 Improve EO participation in moving toward refined business model
;
SO
-
4
Improve demonstrated leadership and decision making by
EOs
;
SO
-
5 Maintain 100% employee
ownership

Strengths

++

Strength

Rationale

Item Ref.


The addition of quarterly scans to
the
Strategic Planning Process (Figure 2.1
-
1)

has enhanced its agility and flexibility
,
and inclusion of some strategic goals in
the LT Scorecard aligns the
planning
with the performance review process.
The process contai
ns elements of PDCA
and is conducted annual
ly,

with both
short
-

and longer
-
term planning horizons

considered
.

Seven team members

was labeled as a(2)

(ADLI)

SPP outlined in Figure 2.1
-
1. Key steps include MVV
affirmation, an environmental scan, SWOT analysis,
gap analysis, and defining strategic objectives and
outcome measures. LT conducts most of the steps
with input from other stakeholder groups. One and
thr
ee year planning horizons; was modified from a five
year plan to enhance timeliness of execution.
Strategic planning process appears to be conducted
on an annual cycle. To address agility and flexibility,
ongoing scans are submitted on a quarterly basis.

Approach appears to be used consistently by leaders
on an annual basis.

Several improvements have been made to SPP.
Examples

quarterly environmental scans, and return
to annual rather than quarterly cycle of determining
action plans and measures.

Aligned w
ith applicant

s performance review process.

First sentence revised per SM suggestion.

All team members supported comment during v2
review.

a(1)


20

++

Strength

Rationale

Item Ref.


The collection and analysis of data for
use in strategic planning supports

the
applicant’s

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愨㌩



Each of the applicant

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潮o

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瑨t

applicant’s
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s


瑨t
company’s b
畳i湥ss
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r
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b

Notes

a(2) Approach to create and environment for innovation. Approach to determine strategic opportunities. Although I
did
n’
t
completely
see this
, I was willing to give the applicant benefit of the doubt, but the rest of the team was not. See OFI.

a(4)

consider which processes leverage core competencies, and which could provide better value through Partner
Suppliers (Figure 2
.1
-
3). Core competencies are evaluated to ensure their continued value, and new core competencies
are developed as needed.” This portion of the strength comment conflicts with
an

OFI this
i
tem
,

since the applicant does
not describe a systematic process.

a(
4) “
The applicant uses external suppliers and partners to provide processes in which they have stronger competencies
or cost effectiveness.” This portion of the strength comment conflicts with the OFI included for this
item

since the applicant
does not des
cribe a systematic process.

b

balance short
-

and
long
-
term time horizons and consider the consider the needs of all key stakeholders (Figure 2.1
-
5).
This portion of the strength comment conflicts with the OFI for this
item

since the applicant does not des
cribe a systematic
process.



21

Opportunities for Improvement



Opportunity for Improvement

Rationale

Item Ref.

X

It is unclear how the applicant creates an
environment that supports innovation, how
the generation of innovative ideas lead
s

to
strategic opportunities, and how
the applicant
decides which opportunities to pursue. For
instance,
the processes used to create the
chief innovation officer position and
to identify
strategic opportunities are not evident.
Systematic approaches may

ef
fectively
promote the applicant

s value of Creativity
and its core competency of
Ingenuity
.

Seven team members

Four team members
doubled

this OFI.

(AI)

LT evaluates strategic opportunity but not
described

how these opportunities are identified.

Unclear ho
w the creation of the chief innovation officer
creates an environment that supports innovation. No
process is described in the application.

Reframed so
-
what to be positive per
one team
member’s
suggestion.

All team members supported this comment during v2
review.

Two team members

do not support
doubl
ing the
comment. All other team members support
doubl
ing
the comment. Will leave it
doubl
ed for consensus call
dialogue.

a(2)


How the
applicant

decide
s

which processes
to

accomplish internally

and

which

to

outsource

i
s unclear
. For example, a process
for considering factors such as core
competencies and cost in such decisions is
not evident
.
In light of
the applicant
’s

two
special EMS partners and more than 70
Partner Suppliers
, systematic approaches
in
this

area
may

ensure fact
-
based decisions
about
whether the
competencies necessary
to provide better value

reside internally or
externally
.

Four team members

(AI)

State
the applicant

use the Work System Review
Process (Figure 2.1
-
3) but it is unclear who is involved
in this process (i.e. are suppliers part of this decision?).
It is also unclear what the steps of the process are for
making these decisions (i.e. is it systematic or a
ge
neral discussion?)

Based on feedback, am moving this OFI to the number
2 position. Also rewrote the so
-
what to tie it more
strongly to
the
Partner Supplier

key factor. So
-
what
revised per
a

suggestion.
First

part of comment revised
per
two

suggestions.

All

team members supported this comment during v2
review.

a(4)


It is unclear how the applicant

s strategic
objectives consider the needs of the
community. For example
,

it is not evident how
the
applicant considers the
greater Nashville
community

s needs for secure employment
opportunities, leadership in civic
organizations, and support of community
development.
C
onsider
ing

and address
ing

these needs
may

help

the applicant
fulfill
its
mission to enhance its communities.

Six team members

One team member
doubl
ed
the
comment
.

(AI)

Applicant states that a review of the measures
contained in the balance scorecard is the cue to
balancing the needs of key stakeholders, but the actual
process to ensure this is not described. Unclear
whether key s
takeholder group of community is
addressed in strategic objectives.

After review of
one team member

s v2 feedback, I
deleted the first part of this comment related to lack of
longer
-
term

objectives. Good catch

thank you.

All team members supported this com
ment during v2
b(2)


22



Opportunity for Improvement

Rationale

Item Ref.

review.

Notes

a(1)

The applicant does not appear to have a systematic process for addressing the need for organizational agility and
operational flexibility.” This conflicts with the strength comment written for this
item
.

a(1)

How specific steps in the SPP take place
is

not clear.” This conflicts with strength comment written for this
item
.

a(1)

The applicant does not clearly define how short
-

and long
-
term planning horizons are defined in a systematic
manner.” While I agree t
here is not a robust process for how the applicant arrives at one
-

and
-
three year planning
horizons, I did not include this OFI as one of the vital few. We can reconsider if the team feels strongly about it.

a(3)

Lack of approach to identify risks to
sustainability.” Not one of the vital few.

a(3)

It’s unclear how data are analyzed to develop information regarding strategic challenges, strategic advantages and
risks to sustainability.” Applicant uses SWOT analysis to determine strategic challenges and

advantages, which was an
adequate response, so I did not include this as an OFI.

a(3)

Not clear how applicant develops information on its strategic challenges and strategic advantages as part of its
SPP.” Applicant uses SWOT analysis to determine strateg
ic challenges and advantages, which was an adequate
response, so I did not include this as an OFI.


Scoring

Score Range:
50
-
65%

Score Value:
55

Why shouldn’t the score be in the range above or below the selected one?
The score should not be in the range
below because the applicant has approaches responsive to most overall requirements (with the exception of
how work system decisions are made). The SPP is well deployed and routinely undergoes evaluation, with some
improvements noted. Most approaches are al
igned with organizational needs.

The score should not be in the range above because there is the lack of an approach to make work system
decisions (an overall requirement), learning does not appear to include innovation, and approaches are not
integrated w
ith current and future needs.

One team member

recommends score of 45.

Two

support score of 50, but can live with 55 if others feel strongly.

One

supports score of 55.

One

supports score of 45 or 50.

One

supports score of 60 to 65.

Since we have some diffe
rences of opinion about
doubl
ing the a(2) OFI, I will leave the score at 55 pending
consensus call dialogue.






23

Item Worksheet

Item 2.2

Strategy Implementation

Relevant Key Factors

1.

As

an owner each individual actively contributes to the company

s
success.

2.

Vision

Lead circuitry innovation for the future

3.

Values

Collaboration
:

we are one team pursuing one vision;
Commitment
:

we deliver on our promises;
living our values through integrity, trust, and respect;
Creativity
:

we invest in continuous innovat
ion;
Courage
:

we are courageous in our pursuit of business excellence; and
Colossal
:

we are proud of our
business performance compared to others.

4.

Customers (Figure P.1
-
4): C
ircuitry reliability,
HDLW circuits,
competitive pricing, suppo
rt for product life
cycle, OTD,
high quali
ty. Priority of each requirement varies by business
/
customer segment

5.

Community: provide secure employment opportunities, steward of air and water quality, partner in
business community (i.e. provide leadership in civic organizations,
support community development
activities)

6.

Technology changes: ability to double number of transistors on a silicon chip nearing full capacity;
research on replacing copper with other conductive materials; exploring use of photons rather than
electrons as a

way to redefine its niche market

7.

SC
-
1 Industry growth by acquisition
;
SC
-
2 Expanding customer R&D services
;
SC
-
3 HDLW
;
SC
-
4 Level 3
Sustainability
;
SC
-
5 Engaging EOs in sustainability
;
SC
-
6 Leadership development

8.

SO
-
1 Increase Net Promoter Score
;
SO
-
2
Increase current market share over the next three years by
business segment
;
SO
-
3 Improve EO participation in movin
g toward refined business model;
SO
-
4
Improve demonstrated leadership and decision making by
EOs
;
SO
-
5 Maintain 100% employee
ownership

Stren
gths

++

Strength

Rationale

Item Ref.


Approaches to
action plan development,
implementation, and measurement

reinforce
the applicant’s culture of each individual
actively contributing to the
applicant
’s
success. Directors use t
he Strategy Matrix to
identify
short
-
term

strategic action plans and
measures (Figure 2.2
-
1). Work groups
implement the action plans
, which

are then
cascaded and linked to the
Career
Management Program
through scorecards,
with

progress

tracked at monthly strategy
review sessions
.

Eight team members

(ADI)

Figure 2.2
-
1 lists the 2013 action plans and measures.
Use of a Strategy Matrix by the directors to breakdown
the strategic objections into actions; Matrix is available
on CNet by the
LT and EOs for review. Directors work
with staff to establish outcomes and in
-
process
measure so that progress can be monitored. Plans are
cascaded throughout the company with linkage to the
CMP

via scorecards.

First sentence modified per
one team member’s

suggestion. Further refinement to shorten comment
per suggestion

by two team members
.

All team members support comment in v2 review
.

a(1
,
2,

5)


The allocation of financial and other
resources to action plans supports the
achievement of the applicant’s
strategic
objectives.

T
he LT and AB

review resource
needs
, and
directors and managers perform
a second feasibility review. Approved
resources are allocated to each action plan
,

and the LT adjusts them in monthly strategy
Four t
eam members

(ADI)

Resource needs are reviewed twice during the SPP;
once with LT and AB during the gap analysis; second
is by directors and business segment managers during
their feasibility reviews where they consider space,
equipment, technology, and peo
ple (capability and
a(3)


24

++

Strength

Rationale

Item Ref.

review sessions, if needed.

capacity). Iterative process between departments and
LT with CFO and CEO conducting final review of the
collection of all resource needs to ensure they are
adequate and budgets are finalized.

Resources are managed during monthly leaders
hip
review.

Although the team was split on whether this was a
strength or OFI, the applicant shared enough evidence
to support including it as a strength. I did NOT include

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