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Focusing on the employees' cultural transformationGlaucia Alves – Mehdi El ManssouriWednesday, October 5th

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Portfolio highlights

SUBWAYS Over 900 projects around the world delivered to date

RAILWAYS

REFINARIESROADS

PORTSAIRPORTS

NUCLEARBUILDINGS

PIPELINESWATER

THERMALSHIPYARDS

HYDROMINING

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Amazônia ArenaFirst experience of Lean methods

ANGRA Nuclar plantImplantation of Lean methods

Manaus Thermal plant and Bahia regasification terminalFirst impantation on industrial construction

Formation of Lean internal consultant Lean methods Implantation in BR and Lat.Am markets

Project One: Standardization of the company main processes based on the world’s best pactices

Criation of a unique purpose of AG’s Construction business unit:“Reach the goals set through the devellopment of our human ressources in accordance with AG’s culture principles and in order to reach a level of excellence in operation that we can be proud of”

2011

2010

2013

2012

2014

2013 2015/2016

Phase 01 Phase 02

Our Lean Journey has begun in 2010

Decision to Implant Lean metodds globally

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Phase 1 approach focused on kaizen events

4

• Based in workshops (7 phases)

• Leaded by consultants (central lean team)

• Decentralized works

• More than 300 workshops in 4 years• Average Productivity increase 18%

• Win/Potential = 49%

• 25 sites with lean projects

• More than 4.000 workers involved

• Saving of US$ 15 mi per year

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Kaizen events approach showed limitations

▪Improvement was not standardized and the company was not learning with thekaizen conducted

▪Continuous improvement was highlydependent on internal consultants

▪Our approach was reactive and consultants were used as firefighters toreach the goals

Results obtained Limitations identified▪The application of lean methodsallowed process improvement

▪Kaizen events conducted by internalconsultants lead to great results

▪Contract manager in contact withlean methods were convinced thatlean methods could help them toreach their objectives

Instead on focusing on changing the process, we understood that weshould change the people first

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“The systems reinforcethe desired change”

“I know what I need tochange and I want to do it”

“I see my leadersbehaving differently”

“I have the skills tobehave a new way”

Phase 2 approach focused on changing people

Aligned systems and structure Understanding and commitment

Role Modeling Capability building

A program was strucutured to transform the organizationbased on the Cohen-Bradford Influence model

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SAT

Aligned systems and structure Understanding and commitment

Role Modeling Capability building

Story cascade Communication

Actions were deployed in each lever

Leaders training Ninjas coach BootcampGemba walks Sponsors Steerco

A3 thinking Process standardization

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Steering Comitee• Biweekly follow up of the

Project progress by thecompany top executives

• Process stabilizationchecklists to identify gaps

• Pain points questions tocreate commitment

Sponsors Role• Participate to the process

design and the standard redaction

• Train other executive on thestandards

• Responsible to cascade theprocess on their contracts

Gemba Walks• Leadership biweekly present on

the construction sites

• Structured approach to go onthe Gemba

“Role Modeling”

Role modeling was a key factor

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We began small an conducted a progressive roll-out

6 mounths 1 year 2 yearsDuration

# Ninjas

Focus

Pilot

Shopfloor

Organization

3 40 70

1 project All projects Organization

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Results allowed a succesfull roll out

10

• Last planner system

• WS lead by engineers

• Decentralized works

• Saving of US$ 65 MM in 2015

• Saving of US$ 60 MM in 2016• Better acceptance

Project managers

Foremen and engineers

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Lesson learned – Key success factors

- Leadership has to be involved during the whole process;- Attach the same importance to people and process;- Be open to different ideas and backgrounds; - Ensure people understand personally the need to change- Devellop a process to measure progress and economic impact;- Focus on the influence model all the time;- Reinforce that good results are consequence of good processes;- Remember that cultural change takes time and is difficult to succeed.