Performance Management Maturity Methodology

1. Performance Management Maturity Methodology Mitchell Weisberg – Lumen, Inc.

2. Recommendation: IF YOU ARE PLANNING TO COME TO THIS SESSION: Take our Performance Management Maturity Assessment before attending this session for greater value from the session. You can take the assessment survey at: www.Lumeninc.com/Maturity We will email you your results prior to the session so you can compare your results with others in the session.

3. Objectives Provide deeper understanding of how performance metrics will drive higher performance in your company Understand why knowing maturity is key is achieving success in any performance management implementation Learn how to adapt approach to your organization’s performance maturity to accelerate implementation and achieve faster results Learn from the execution of performance metrics at Amgen Develop next steps to apply learnings in your organization

4. Agenda • Welcome & Introduction • Lumen, Inc. Overview • Current Situation • Amgen Case Study: CPM Maturity Applied • Performance Management Maturity Model • Lessons Learned • Discussion

5. Lumen, Inc.is a specialty management consulting firm of senior, experienced professionals who collaborate with clients to rapidly transform them into high performance businesses. Align business performance with the business strategy Establish and execute performance management throughout the organization Rethink customer and employee relationships for greater profitability, satisfaction and retention Reengineer processes for greater productivity Manage change more effectively for rapid achievement of competitive advantage

6. Technology Agnostic: Relationships with Vendors Across the CPM Landscape Our deep familiarity with all the key vendors in the CPM space is a strength Counsel is objective, choosing the right product for the client based on needs and best-in-class solutions Vendors provide training to our consultants on a regular basis, so our service to clients is always current

7. Agenda • Welcome & Introduction • Lumen, Inc. Overview • Current Situation • Amgen Case Study: CPM Maturity Applied • Performance Management Maturity Model • Lessons Learned • Discussion

8. Businesses Continue to Face the Same Challenge of Faster Growth and Higher Performance Over abundance of data and information Management demands for better information for decision making Increased market expectations Greater internal complexity More dynamic markets require higher business agility Organizational Performance Issues Benefits of CPM • Measure performance outcomes with leading metrics enabling managers to anticipate and respond to change with decisions or actions • Consistently and systematically monitor progress towards goals and targets to enabling proactive addressing of issues • Enable executionof the company’s strategy through line of sight objectives, processes and practices • Increased ability to manage internal performance to market demands 1 April 2014 9

9. Today’s Economy Superimposes a Greater Challenge: Decrease Costs While Maintaining Capability for Growth Improving operational efficiencies Without reducing production capability Reducing human capital Without losing valued employees Reducing sales and service expenses Without customer attrition Maintaining financial results Without missing forecasts and market expectations More dynamic markets requiring higher business agility… … and greater visibility 1 April 2014 10

10. CPM Delivers Capability for Better Business Performance • Corporate Performance Management: system of metrics, processes and supporting IT that enables users to define, monitor, manage and optimize process outcomes while creating alignment with strategic objectives across multiple organization levels • Successful CPM requires: • Standard methodology and consistent metrics • Culture supporting fact-based decisions • Technology to deliver accurate metrics and analysis • Incorporates tool and methodologies: Balanced scorecard, performance metrics, strategy map, Lean, SixSigma, value tree, process improvement or redesign, change management

11. CPM Closes the Gap Between Strategy and effective Execution Strategy Execution

12. Manage the Business Conduct the Business Performance and Management Business Intelligence

13. Achieving the Value of CPM Significant resource savings Simplified reporting environment Reduced budget and reporting cycle times Lowered cost of compliance Reduced spreadsheet proliferation Tangible Benefits Intangible Benefits • Movement to a flexible, rolling forecast and budget cycle. • Significant improvements in forecasting accuracy • Improved decision-making capability • Increased accountability through better visibility • Information to manage the business more effectively

14. Why isn’t Performance Management (CPM) delivering the expected value for everyone who is implementing it 15

15. Agenda • Welcome & Introduction • Lumen, Inc. Overview • Current Situation • Amgen Case Study: CPM Maturity Applied • Performance Management Maturity Model • Lessons Learned • Discussion

16. Amgen: A Biotechnology Pioneer Founded in 1980, Amgen was one of the first biotechnology companies to successfully discover, develop and make protein-based medicines Today, Amgen is leading the industry in its next wave of innovation by: Developing therapies in multiple modalities Driving cutting-edge research and development Continuing to advance the science of biotechnological manufacturing

17. Amgen’s Mission… …to serve patients Inflammation Nephrology Oncology

18. Amgen's Business at a Glance Locations Cambridge, MA Norway Denmark Luxembourg Finland Toronto, ON West Greenwich, RI Sweden The Netherlands Washington, DC Belgium Estonia Ireland Burnaby, BC Latvia Lithuania Bothell, WA Russia England Seattle, WA Czech Republic Longmont, CO France Poland Boulder, CO Switzerland Slovakia Hungary Japan Fremont, CA India United Arab Emirates South San Francisco, CA Hong Kong Greece Slovenia Thousand Oaks, CA Austria Germany Mexico City, Mexico Italy Louisville, KY Spain Australia New Zealand Juncos, Puerto Rico Portugal

19. Amgen’s Products For additional information about Amgen products, including important safety information, please visit www.amgen.com

20. What Was the Problem? • Over a dozen Dashboards with different metrics and design • Large number of non-Standard metrics • Significant manual effort to deliver dashboards • Challenges to do factual comparisons between multiple organizational unit performance

21. Solution: Service Partnership of Business & IS to Deliver Metrics Using Standard Methodology • Amgen’s approach • CASE STUDY DISCUSSION

22. Approach : 3 Step Process • Created Custom Performance Management Methodology • CASE STUDY DISCUSSION AND ANSWERS

23. Performance Management Methodology Framework to consistently implement metrics Repeatable and flexible process from project inception to delivery Drives top-down and bottom-up approaches Playbook contains instructions, templates, and roles & responsibilities

24. Performance Management Methodology

25. Technical Solution Maintains Standard Metrics Enabling Cross-business Unit Comparisons Metric Performance Scorecard Hierarchy IBM Cognos Metrics Studio • Amgen standard IT scorecarding application • Powerful tool to track and analyze scorecard & metrics performance • Indicates the current status of the business • Supports a performance management culture SCREENSHOTS OF IBM COGNOS SCREENS DELETED

26. The Scorecard Enables Root Cause Analysis of Problems Metrics Studio contains rich features … • Quickly identify and focus on problem areas • View performance trends over time • View metric relationships & impact diagrams • Drill-down reports & analysis for details or context SCREENSHOTS OF IBM COGNOS SCREENS DELETED

27. Metrics Definitions are Held in a Central Repository • Metrics Catalog • Web-based tool integrated with IBM Cognos Report Studio • Supports the performance management methodology SCREENSHOTS OF IBM COGNOS SCREENS DELETED

28. Methodology • Technology • Prototype • Pilot… But was it complete? Did it deliver expected results? Why not? ?

29. What Was the Problem “2”? • CASE STUDY DISCUSSION AND ANSWERS • (Hint: Performance Management Maturity)

30. Agenda • Welcome & Introduction • Lumen, Inc. Overview • Current Situation • Amgen Case Study: CPM Maturity Applied • Performance Management Maturity Model • Lessons Learned • Discussion

31. Performance Management Maturity Model: Charting the Course Developed with input from across industries and thought leaders Represents a formula for long-term success that is a function of three fundamental capabilities Outlines a path forward as companies work toward closer alignment of business strategy and execution

32. Three Dimensions of the Performance Maturity Model • Organization and Culture • The practices and integration of metrics into the organization’s behaviors; includes the breadth and depth of metrics in managing performance • Processes • The practices and structures for producing, distributing, managing and using performance metrics; includes the quality of the metrics • Technology and Data • The technology support and data quality that underlies the metrics, scorecards and dashboards

33. The Model is Based on Three Dimensions Performance Maturity Model Organization & Culture Processes Technology & Data

34. Lumen Performance Management Maturity Model Organization & Culture Processes VISIONARY MASTERY INTERMEDIATE EXPERIMENTATION Technology & Data

35. Lumen Performance Management Maturity Model

36. SO Where Was Amgen: CASE STUDY DISCUSSION

37. Amgen: Metric Maturity Survey Results (Example)* Overall metrics maturity People Process & Technology • CASE STUDY DISCUSSION AND DATA • (Hint: Performance Management Maturity) *NOTE: Numbers disguised, but demonstrating trend

38. Map Yourself Against the Model Organization & Culture Performance Maturity Model Processes Data subset to highlight participants in Session VISIONARY x 8 x 14 21 x 24 x 26 4 x 20 17 x 25 x 16 MASTERY 18 31 10 x 12 22 13 x 8 19 28 6 x 15 32 x INTERMEDIATE 5 x 9 x 32 x 6 21 17 5 29 x 16 4 x x x 14 28 10 9 22 13 31 20 x EXPERIMENTATION 12 19 24 x 25 x 15 29 26 x x 18 32 4 Technology & Data 31 x 5 7 26 7 x x 22 x 10 x 19 x 25 20 x x x x x x 9 12 8 28 21 15 13 16 7 14 17 29 18 24 6

39. Process Dimension Appears Least Mature Overall Process Organiz Technol

40. Process Dimension Appears Least Mature Finance IT Overall Overall Organiz Process Tech Organiz Process Tech Operations Overall Organiz Proc Tech

41. Agenda • Welcome & Introduction • Lumen, Inc. Overview • Current Situation • Amgen Case Study: CPM Maturity Applied • Performance Management Maturity Model • Lessons Learned • Discussion

42. Observations Performance Management Maturity is quite low Maturity levels may vary by department You must balance multiple dimensions of maturity challenges The Organization/Culture and Process dimensions (Methodology for dashboard/scorecard, metrics) are the least mature areas CPM delivers significant benefits, and, in today’s economy is a critical management methodology to implement.

43. Observation: You can accelerate value delivery by addressing maturity issues: • Use the Performance Maturity Model to benchmark your dashboard initiatives and goals • Adapt methodology to address different maturity of organizational units • Expand your approach to address the dimensions of performance maturity • Cultural, Process and Technology Take our Performance Management Maturity Assessment at www.Lumeninc.com/maturity Use the Results to Put your Project Back on the Fast Track

44. Throw Away “The Box” Use the Performance Maturity Model to initially to establish your CPM initiatives and goals Adapt methodology to address different maturity of organizational units Expand methodology to fit dimensions of performance maturity Cultural Process Technology Target the value for your maturity level “don’t shoot for the moon” Value delivered is relative to the maturity of the organization Use the Performance Maturity Model to ensure that your CPM initiatives have the right balance of people, processes and analytic applications Garter, 2008

45. Key Takeaways Customizing the Performance Management approach to the company’s Maturity is a key element to achieving efficient, successful implementation… and ultimate USE of a CPM methodology Start now with an assessment of Performance Maturity!

46. Thank you! Contact Information: Mitchell Weisberg • mitch@lumeninc.com • +1 781-894-9202 (office) • +1 781-249-3750 (mobile) Take ourPerformance Management Maturity Assessment now: www.Lumeninc.com/Maturity We will email your results.