Building a talent factory

The previous chapters provided an overview of processes and management tools aimed at engaging all managers along the value chain in moving Akzo Nobel forward as a leader in developing sustainable solutions for our customers. In 2007 Akzo Nobel employees were motivated to contribute to developing sustainable solutions via a number of training programs, conferences and workshops.

The ICI deal adds more exciting elements to the talent factory concept: even better career opportunities for Akzo Nobel and ICI employees and a broader scope of business all over the world.

We do not define talent as being a select few within the company. All our employees have talents that need to be developed and nurtured. It is Akzo Nobel’s strong ambition to be recognized by our employees and by those interested in joining us as a true talent factory – a company which offers opportunity to its employees for ongoing learning, growth and development.

The following three building blocks are key in order to successfully create the talent factory:

• High performance culture
• Ongoing talent development
• Strong leadership.

A high performance culture

A high performance culture allows us to drive and deliver our business success today and tomorrow. The Performance & Development Dialog and the Employee Survey are two examples of what we have achieved so far.

Sustainability dominating the agenda In a large number of company meetings, sustainability is dominating the agenda in order to transform the company into a place where entrepreneurial spirit, out of the box thinking and focus on our customers’ needs is an obvious part of our culture and a driving force for our business success. 60 senior executives received training in the Executive Leadership Forum 85 top managers from our Car Refinishes business reviewed their BU-specific sustainability process Nine teams consisting of around 50 young managers prepared sustainability related business cases – to be implemented by the Akzo Nobel businesses 12 young managers – all selected to take part in the Antarctic Leadership on the Edge expedition with Robert Swan – are responsible for managing business-driven sustainability projects together with their project teams 30 senior purchasing and HSE managers participated in joint training sessions to develop an improved process for sustainable supply chain management Sustainability was an integral part of the Take Time for Technology conference – attended by 150 technology and manufacturing managers Senior marketeers in five business units were trained in how to include the results of eco-efficiency analysis in their sales and marketing process R&D managers from all business units were involved in integrating eco-efficiency in their stage gated research processes High potential manufacturing managers dealt with sustainability issues as part of innovative manufacturing Organized by “Your Akzo Nobel”, a future leaders group, more than 400 employees took part in three separate events focusing on key sustainability challenges such as energy efficiency and climate change.

Performance & Development Dialog

As the markets we compete in constantly change, it is important to continuously improve our employees’ skills. Encouraging employees to develop to their maximum potential ensures Akzo Nobel’s long-term success. The development of employees is a priority at Akzo Nobel and is, of course, at the heart of people management.

The Akzo Nobel global performance appraisal program, the Performance & Development Dialog, was launched in 2005. The key objective was to sustain the performance and growth of both our employees and the company. The Performance & Development Dialog is now part of our culture and practices in almost all parts of our company. In 2007, 53 percent of our employees were using the web-based system, while the remainder were using the paper version.

Employee Survey

As planned, a pulse survey to follow up the 2006 company-wide Employee Survey was conducted during May 2007. The results have improved since the 2006 survey, especially with regard to “commitment to values” (up six percent), and “innovation” (up five percent).

The survey showed improvements in 19 questions out of a total of 52, mainly in the areas “fair treatment”, “open/honest environment” and “act to defend business principles”. This means that we are making the right improvements. We remain strongest in questions related to customer focus, quality commitment and engagement. We regard the ongoing agenda of the company, our business results and the hard work throughout the organization as being the key reasons for these further improvements. And we do understand from this year’s pulse survey that we need to continue with our journey towards stronger people management programs and practices. Of all categories, this remains the area where we see most room for improvement going forward.

The result of this year’s pulse survey is a next step in our development. The message is clear, the more we take our employees seriously and engage with them on further improving our company, the more we stimulate a better working environment and better engagement.

employee survey 2007

	2006 > 2007	Total % favorable	Total % neutral	Total % unfavorable	Management favorable	Non-management favorable
Customer focus	+3%	85	11	4	87	85
Quality commitment	+3%	82	13	4	88	80
Commitment to values	+6%	77	16	7	83	75
Engagement	+4%	76	18	7	80	74
Teamwork	+3%	75	17	8	82	71
Results orientation	+4%	72	20	8	77	70
Innovation	+5%	66	25	9	74	63
Health safety environment	0	65	24	11	73	61
Stimulating open climate	+4%	64	24	11	73	61
Survey utilization	+1%	58	27	15	62	56
Developing others	+2%	55	24	21	60	52
Managing performance	+3%	55	26	20	58	54

Ongoing talent development

We have to attract and develop all talent for Akzo Nobel’s business – and for the growth of our people. In this area, the Development Dialog between employee and manager has been launched. The Development Dialog further supports development by providing a process and tools for our employees and their managers to discuss development needs and career planning. Akzo Nobel encourages its employees to take the lead when it comes to their own development. Good managers recognize the positive impact of development on employees and will actively support their employees’ development.

Strong leadership

The most important task as a leader is to sustainably ensure the future of our company. We have to develop the leaders of today and tomorrow in order to sustain and grow our business. To have a strong performance in our businesses our managers at senior level must be able to identify, assess and develop leadership talent, thus we have implemented the “Leadership Talent Reviews”, a process where decisions are made to identify future leaders at all levels in Akzo Nobel and its business units.

A common definition and templates to discuss the ultimate potential of candidates and their readiness to grow have been implemented, and we have a stronger focus on a diverse leadership talent pipeline. In 2007, we have taken this process further into the organization, in order to ensure that we better understand our leadership talent and the opportunities to help them develop.

The talent factory concept

With the talent factory concept we can ensure the requirements for a sustainable future for our company. Our employees can expect Akzo Nobel to provide an entrepreneurial and collaborative environment which is based on integrity and responsibility. We create opportunities for ongoing learning, development and personal growth. And we expect our employees to embrace and deliver our entrepreneurial and performance driven culture and to continuously seize opportunities to learn and grow.

The ICI deal adds more exciting elements to the talent factory concept: even better career opportunities for Akzo Nobel and ICI employees and a broader scope of business all over the world.

Akzo Nobel Community Program

As a leading international company we are also committed to the communities in which we live and work. The aim of the Akzo Nobel Community Program is to encourage employees to actively contribute to their local communities, supported by funding and/or products and facilities from the company, while developing their own talents and leadership skills.

Many employees throughout Akzo Nobel, in all continents around the world, have embraced the opportunities the Community Program offers. Their enthusiasm is the basis for providing the necessary funds, products and facilities.

Since the start of the program mid-2005, more than 500 projects have been initiated across the globe, varying from giving sustainable support to disabled people, young children and the elderly, to providing better conditions for homeless people, victims hit by disasters, deprived groups and even animals. Tens of thousands of people have already benefited from the financial support and the hands-on assistance from more than 2,500 of our volunteering employees.

Specific information about these projects can be found at www.akzonobel.com.