Lincoln Industries --Maximizing Business Performance Through a Balance of Operational & Cultural Transformation--

Current Business Landscapes

2

63% of companies do

not have

measurements or

ROI goals associated

with their culture-

based programs

2 out of 3 corporate

executives say that wellness

programs are ineffective

due to low engagement (less

than 20% on average)

Workplace engagement is at an all time

low – 70% of your people “dream of

having a different job”

Over $73B per year in lost

work days and work

performance due to health

conditions and

workplace injuries

In 2010, the average health care cost

per employee was up 7% from 2009,

2011 estimates $12,500 for healthcare

– no end in sight

Economic conditions

placing continued

pressures on

supply chain

relationships –

businesses are

looking for the “edge”

Current Business

Landscape

Customers &

Suppliers

Operations

Leadership

Workforce

Culture

Leaders are having to do

more with less – need

innovative ways to improve

performance

“Insanity: doing the same thing over and over again and expecting different results”

--Albert Einstein

pH: A Vital Balance

3

The chemical term "pH" refers to the acidity or basicity of a solution.

Critical to maintaining the system, pH balance simply means that the

system or organism is at the pH most appropriate for optimizing

performance.

What’s the pH balance of your organization?

Why Culture Matters

4

• Culture affects how people act and

perform

• People do what is rewarded or

reinforced

• For better or worse

• Just ask the New Orleans Saints

•A well-conceived culture will stimulate

your people to do their best work on the

job, at home, and in the community

• Culture is a powerful differentiator

Linking Performance & Culture

5

Career Progress

Part of Something

Bigger Than Self

Ability to Be Effective Contributor

Materials / Equipment Provided & Clarity of Expectations

The Hierarchy of Cultural Stages

The Workplace

Direct Correlation

Organizational Outcomes

• Reduced Turnover

• Higher Customer

Satisfaction

• Individual Productivity

• Organizational Profit

• Loyalty

C.L. Keyes & J. Haidt Eds.), Flourishing, The Positive Person & The Good Life (pp. 205—224).

Washington, DC. American Psychological Association.

CNN – Lincoln Industries Wellness

A Unique Approach: The Lincoln

Industries Story

7

• Founded in 1952

• Consistent history of profitable growth

• 500 people in a 24/7 operation

• 400,000 sq. ft. of production facilities

• TS16949 and ISO9001 quality systems

• ISO14001 environmental certification

• Great Places to Work Institute -Top 25

mid-size company to work for in America

(5 years)

Who We Are

• Provide innovative solutions

and exceptional service for

our customers’ toughest

challenges through

collaborative development,

unique supply chains

(domestic and global),

creative combinations of

applied technologies, and a

work ethic that knows no

bounds.

What We Do…

The Lincoln Industries Philosophy

• Foundational culture

• Fit, talent and skill

• Shared ownership

• Simplify the business

• Measures that matter

• Move the metrics

Our Beliefs are

embedded in

the very core

of our

company.

They provide

the foundation

of our culture

Foundational Culture - Beliefs

• Our people and their unique individual talents are valued

• Appropriate recognition motivates our people to be successful

• Leaders create value

• Innovation creates continuous improvement

• Profitability ensures the survival of our company

• Positive relationships build loyalty

• Honesty is essential in all transactions

• We create value for our customers

• Wellness and healthy lifestyles are important to our success

More than

words on a

wall, Drivers

guide our

relationships

and business

decisions.

The Drivers set

us up for

success.

Foundational Culture - Drivers

• Quality…in everything we do

• Productivity improvement…is a continuous process

• On-time delivery…because customers depend on us

• A safe working environment…is our commitment to each other

• Environmental responsibility…is our commitment to our

communities

• People development…because our people create our success

• Company growth…is the result of providing a superior service

• Value-added service…means doing more for our customers

Our Pillars of Success

4 Pillars of Lincoln Industries

People Operational

Excellence

Supply Management

Growth

Pillars of Success - People

Wellness

Selection

Training

Safety

Communication

Culture

Key People

Issues

Well-Being Milestones

Business Milestones

2000 - 2004 2005 - 2007 2008 - Present

Wellness Part of Business Strategy

Sales Up 24%

Expansion: 33,000 sqft Named Lincoln

“Business of the Year” Lincoln Plating

Becomes Lincoln Industries

New Division: Lincoln Chrome

New Division: Lincoln Performance Coatings

Highest Customer Satisfaction Scores in Company History

The Transformation of an Organization

Sales Up 19%

Sales Up 24%

Expansion: 50,000 sqft

# of People: 400

Wellness Manager Hired

Tobacco Free Campus

1st WELCOA Award Earned

Outcomes Based Evaluation of Wellness Program

go!Platinum developed

Wellness Part of Individual Objectives

Required Health Checks

Largest Expansion in Company History: 80,000 sqft

Sales Up 20% Sales Up

11%

# of People: 500

$100M in Revenue Achieved

Sales Up 30%

First Mountain Climb

CDC Audits Wellness Program for Benchmarks

2nd WELCOA Platinum Wellness Award Earned

Great Places to Work Award

WSJ Feature

CNN Feature

Partnership for Prevention Award: “Leading By Example”

Healthy Lifestyle Reimbursement Offering

Koop Wellness Award

Supervisor Wellness Scorecards

Governor’s Award for Wellness

JOEM / HERO Research Project

Partnership with HWAY

Healthy U Opens

Foundational Culture

Healthy People

Optimal Business

Performance

Simple: Healthier Engaged People

Perform Better & Cost Less

16

Our Wellness Philosophy

The “Accountability Formula”

17

Individual Successes

Peer-Influenced Accountability Resources & Tools in Place for

Individual Success Incentives / Engagement

Strategies Tailored to Population

Leadership Engagement

Resources & Tools in Place for Leadership Success

Departmental Measurement Results Highlighting Best Practices / Opportunities

Measurable Strategies

Measurement Results Driven to All Levels of the Organization

Performance Measured on BOTH Operational and Cultural Metrics

Trended Savings Lincoln Industries’ Outcomes

18

The ROI Lincoln Industries’ Outcomes

19

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

Voluntary Involuntary

U.S. Ave.

U.S. Ave.

Lincoln

Industries

Lincoln

Industries

Maximizing Your HR Spend - Human Resources Executive June 2011

Turnover Lincoln Industries’ Outcomes

Lincoln Industries

Lincoln, NE

Nebraska

National

74.1

72.8

67.8

66.1

Well-Being Results Lincoln Industries’ Outcomes

People Involvement

• Wellness Wednesdays

• Tobacco Cessation

• Healthy behavior quarterly events

• Behavior Change Support & Coaching

• Education & Communication

• Life Plans

• Platinum Fit

• Jazzercise

• WeightWatchers

Leadership Engagement

• Visual leadership involvement – “walk the

talk”

• Senior team workouts

• Component of leadership development

programs

• “3 for 3”

• All company wellness metric

Well-Being Assessment Results

The “Accountability Formula”

22

Individual Successes

Peer-Influenced Accountability Resources & Tools in Place for

Individual Success Incentives / Engagement

Strategies Tailored to Population

Leadership Engagement

Resources & Tools in Place for Leadership Success

Departmental Measurement Results Highlighting Best Practices / Opportunities

Measurable Strategies

Measurement Results Driven to All Levels of the Organization

Performance Measured on BOTH Operational and Cultural Metrics

Wellness As a Performance Objective

23

• 100% of individuals have wellness

objectives

• Directly tied to annual merit increase

• Objectives are set by the individual

• Well-being model

Seth

• Joined Weight Watchers

• Lost 100 lbs.

• Summited three 14ers

• Finished 1st Marathon in

2010

• Finished 1st Ultra-Marathon

in 2011

• Wellness Champion

The REAL Reason

John – 55 years old

• Quit smoking (smoked 20+ years)

• Lost over 75 pounds

• Half Marathon

• Finishing college degree

• Contagious attitude about health

and wellness

The REAL Reason

Wellness & Benefits

• Outcomes based incentives

– Metabolic Syndrome Risk Factors

– Tobacco Free

• Premium discounts

• Health Reimbursement Arrangement contributions

Go! Platinum – 14,000 ft Mountain Climb

Replicating and Scaling Success:

Transforming Your Organization

27

Applying pH to Your Organization

Determinants of Your Performance Today

Industry,

Demographics,

Philosophy, Location

Operational Metrics

Your Potential Balance

Culture & Well-

Being

Industry,

Demographics,

Philosophy, Location

Strategic Roadmap Design

28

How We Do It - 9 Levers for Optimized Performance

29

High Performance

Culture

Organizational Purpose

Effective People

Selection

Benefits Synergy

Sustained Engagement

Work Environment Optimization Leadership

Development

Leadership Accountability

Colleague Well-Being

Customer & Supplier

Collaboration

Comprehensive Measurement

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• Perceptions of management

• Results driven to all levels of your organization

• Highlights actionable opportunities

• Best practices emerge

Leadership

• Perceptions of workplace culture

• Indicators of team engagement levels

• Results driven to all levels of your organization

• Strong correlations to well-being

Culture

• 5 Spheres of Well-Being

• Career / Occupational covered in previous measures

• Broader than traditional HRA’s

• Measurement of programs aimed at improving well-being

Outcomes

The Value of Organizational pH

31

Measurement

Customers / Suppliers

Wellbeing

Foundational Culture

Leadership

Reduced Absenteeism

Optimal Business

Performance Lower Workers’

Comp

Improved Engagement

Reduced Turnover

Higher Customer

Satisfaction

Reduced Healthcare

Costs

Measurable Outcomes