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Applied Materials External Use

Applied Materials Case Study

Transition from International to Global

Operation

Tami Shoham

GIS EMEA head

[email protected]

September 7, 2011

Applied Materials External use

Agenda

Applied Materials overview

Global Information Systems (GIS) overview

„Global Culture‟ Program

– The challenge and the approach

– The mission and main initiatives

– Program Measurements

– The new norms, what did we learn

2


Applied Materials – Who We Are

World leader in Nano manufacturing technology™ solutions

#1 equipment supplier in semiconductors, LCD displays and PV solar

Expanding into the next wave: energy and environmental solutions

1970+

Computing

1990+

Communications

2010+

Energy and Environment

3


* As of May 23, 2011

Fiscal year-end October 31, 2010

Other information as of Q2 end, May 1, 2011

At A Glance

Applied Materials solar energy system at its campus in

Sunnyvale, CA, is one of the largest corporate solar

power installations in the U.S.

Ticker: Nasdaq: AMAT

Market Cap*: $18.2 billion

Fiscal 2010 Revenue: $9.5 billion

Fiscal 2010 R&D: $1.1 billion

Founded: November 10, 1967

Headquarters: Santa Clara, California

Global Presence:87 locations in

20 countries

RD&E and/or

Manufacturing

Centers:

Canada, China, Germany,

India, Israel, Italy, Singapore,

Switzerland, Taiwan,

United States

Employees: ~13,100 worldwide

Patents: ~8,200 issued

4 Overview – Data as of Q2‟11


Applied Materials Worldwide

Alzenau, Germany

Dresden, Germany

Feldkirchen, Germany

Heimstetten, Germany

Cheseaux, Switzerland

Treviso, Italy

Hukou, Taiwan

Tainan, Taiwan

Research, Development and Engineering

and/or Manufacturing Centers:

Silicon Valley, California

Austin, Texas

Toronto, Canada

Rehovot, Israel

Bangalore, India

Chennai, India

Xi‟an, China

Sales and/or Service Offices

IsraelIndia

KoreaEurope

Taiwan

UAE

China

South

East Asia

North America

Japan

5


Applied Materials Israel

PDC 1 : RD&E and Demo LabsPDC 2/3 : Manufacturing

6

~1,000 Employees

– RD&E, Marketing , Manufacturing, Service

– Facilities: 613,000 sq. feet

• Clean Rooms & Labs: 49,000 sq. feet


Global Information Services in A Glance

7 Overview – Data as of April 2011

Head Quarters: Austin, Texas

Main locations:

Texas, California, India, Israel,

China, Italy, Singapore,

Switzerland, Taiwan, Korea,

Japan and Germany

Employees: ~250 worldwide

Contractors: ~800 mostly Managed Services

Systems:SAP, Oracle, TeamCenter and

many legacy applications


Environmental background

-- The Challenge and the Approach

8

Background Drivers Need to change

The Business in Asia is growing Stay close to the customer

Global roles operating from

everywhere

Need a new global operating module,

from US-centric to a real global

organization

Deep changes in organizational

structure requiring matrix mindset

Move from centralized organization to

global teams across time-zones and

remote leadership

Multiple locations, M&As, new

sectors

Standardization, cost reduction and

elimination of local solutions


„Global Culture‟ program


Main findings:

GIS is a core-periphery network

80% of US interactions are internal within US

40% - 60% of Asia and EMEA interact with US

Interaction between Asia and EMEA is less then 10%

10

GIS Network Analysis survey (June 2010)


Mapping: EMEA Networks Composition

11

47%

7%

46%

EMEA Workflow

Within Division

ASIA

US

56%

9%

35%

EMEA Advice-seeking

Within Division

ASIA

US

57%

6%

37%

EMEA Client Communication

Within Division

ASIA

US

61%7%

32%

EMEA Innovation

Within Division

ASIA

US

Within EMEA Within EMEA

Within EMEA

Within EMEA


GIS „Global Culture‟ Core Team

12

Highly effective people

Globally spread between regions and functions


GIS „Global Culture‟ – Program Mission

To support GIS‟ transition to new global operating module,

from US-centric to a truly global organization operating

effectively in collaboration and trust while strengthening

global leadership and presence in Asia.

The program was required to create an environment that:

– Reduces cultural barriers, use cultural differences as an advantage

– Increases employees‟ engagement

– Builds Global GIS leadership

– Leverages skills across all locations

– Operates globally to increase effectiveness

– Builds communication around global time-zone

13


Global Culture Team – Main Initiatives

14

Job Families&

Career Paths

Global Teams lead

Global Projects

Job Rotation

Flexible Hours

Global Leadership

Values

Roles & Responsibil

ities

Global Idea

Forum

Learning &

Mentoring

GLOBALIZATIONCOMMUNICATION

EFFECTIVENESS


Initiative Example: Job Rotation & Mobility

15

How to make it Successful:A pilot has been defined. Job Mobility team will support implementation in GIS and report to SLT

What‟s in it for Applied:Build a GIS organization which supports the business organizational setup (focus on Asia), prepares

for new technologies (cloud) and supports inorganic merger through higher flexibility in organization

Action Plan: Objective: Perform flexible move of personnel between functions (job assignment change) and deploy

HR mobility program in GIS for physical location change.Initiated: Job Mobility and Rotation is a track within GIS Global Culture initiative.

Approach: GIS top-down initiative. SLT pillar leads define program KPIs. Per each assignment

specific KPIs are defined and tracked. Pre- and post assignment surveys will set expectations and

measure result.

Strategy Statement:Past: Job Rotation and Mobility in GIS is not standardized and not institutionalized in strategy,

planning and execution.

Future: Implement a structured process to use Rotation and Mobility as a tool to further improve

capabilities and impact of GIS through increased motivation and skills of employees to support GIS top

trends, strategies and objectives .


Initiative Example: Leadership Values

16

CUSTOMER FOCUS

•Strives to better understand and partner with our customers

•Ability to put the needs of the team and Applied Materials above yourself

ENABLE OTHERS TO ACT

•Strengthen others through personal development

•Enlists others in a common vision – goal – scope or work

•Recognizes contributions

•Builds a spirit of community

•Foster collaboration by building trust

•Makes others successful

COURAGE TO LEAD IN A COMPLEX ENVIRONMENT

•Sets the example through words and actions

•Proactive, takes the initiative and drives opportunities to closure

•Has the confidence to work independently with minimal direction

•Possesses the courage to take risks and drive change

•Addresses conflicts early and positively manages them

CULTURAL AWARENESS & ACCEPTANCE

•Knowledgeable and curious about global cultures

•Adjusts style to cultural differences

•Strives to engage and involve the global team – open boarders

Applied Materials External use17

CIO‟s Choice Award

For his tremendous leadership in a time of

great challenges for Applied‟s Japan

operations, customers and supply chain,

ensuring GIS did everything it could to keep

the business on track. At the same time, he

continued to support the ramp of the Asia

Service Desk in Dalian, China.

Customer Focus Enable Others to Act

Courage to Lead in a Complex Env.

Nameki-san is a GIS Leader

Yasufumi Nameki

Front-End Services

Cultural Awareness and Acceptance


Project management and

measurements


Project Management & Initiatives Follow-up

19

ImplementationPlanningFollow up

KPI‟s and

Plan

Detailed

Change

mgt. plan

**

Follow up

fine

tuning

Plan*

End of

Planning

Phase

SLT

Approval / presentation

Detailed

plan

Initiative

Hi level

PlanningTopic

+++++++"Flexible Hours and

remote work"

+++++++“Job Rotation”

+++--++“Regional Financials”

+++++++“GIS Global Profile”

+++++++“Global Team lead

Global Projects”

+++++++“Job Families”

++++-++“GIS R&R”

+++++++“Global Idea Forum”

+++++++“Mentoring and

Learning”

+++++++“Global team building

events”

Applied Materials External use20

5 - Strongly agree4 - Agree3 - Not sure2 - Disagree1 - Strongly disagree

Target 4.0

Exceeded

Improvement

Needed< 3.5

GIS Global Culture Baseline Survey – 2011

• Excellent global participation

• Overall average rating: 3.69* out of 5 possible


Baseline Survey - Main findings Job families

A. My area of responsibility and job description are

well defined

66% agree or strongly agree

B. I understand my career path options 51% not sure, disagree or strongly disagree

21

R&R

C. I understand how my objectives contribute to the

success of GIS


•Ratings consistently high across all regions

D. Roles and responsibilities are clearly

communicated and aligned across GIS

58% not sure, disagree or strongly disagree

Global team lead global projects

U. I am able to influence key decisions that fall

within my global area of responsibility


W. Leadership opportunities are available in

the regions

• Europe region consistently scored lower

than Asia region and US

• Global leadership is a key improvement

opportunity


Baseline Survey - Main findings (cont.)

22

Flexible hours

H. My manager supports working flexible hours 94% agree or strongly agree

I. On average, how many hours do you spend

each week in meetings outside of the 7:00 am

to 6:00 pm time frame in your time zone

20% with >5 hrs.

K. How many days a week on average do you

work from home ?

• 10% almost full time at home

• 65% work ≤1 day/wk at home

• Asia region works fewer days from home

O. How often do you have 1/1 meetings with

your manager?

• 60% have 1/1 meetings biweekly or more often

• 34% have 1/1 meetgs monthly or less often

P. How often do you meet with your manager in

person ?

• 68% meet in person at least quarterly

• Europe and Asia regions meet their manager in

person less then twice a year

• Executives met with their managers most often

Job mobility and rotation

Y. I am interested in job rotation as an

opportunity for advancing my career or

gaining professional experience / personal

development



Objective Current Value Target

Overall program progress to plan80% complete

on schedule 100% to plan

Organization assessment survey 3.69 (baseline)10% improvement

(3.82)

Network Analysis Survey

Workflow: Asia- 60% |

EMEA- 53% | US- 20%

Advise: Asia- 53% | EMEA-

44% | US- 21%

10% improvement

of workflow outside

of region and

Advise seeking

Job families with R&R defined

90% defined;

on track for 100% by end

of year

100% by end of year

% of identified and approved

rotations in process by x date. Wasn‟t measured yet

Documented and

approved

Target % and date

to be defined

(based on pilot)

% of employees that meet 2 or

more times / year in person with

manager

78%

90% with survey

rating ≥ 3

100% with survey

rating ≥ 2

KPI‟s for Global Culture Project (example)

Overall Program

Job

Families

Job Mobility

& Rotation

Flexible Hours

23


Summary


The new norms and values

We strive to create a strong and effective global matrix organization,

reduce culture barriers, build global leadership and increase employee

engagement

o New Regional and Country Business Partners roles to enable “Close to the Customer” and

matrix management of remote/distant employees

o Defined standard, Global and simple Job families with clear Career path

o Job rotation & mobility supports organizational flexibility and leadership development

o Global leadership development through empowerment, defined values, mentoring and

matrix/remote training

o Built cross culture engagement and trust through global team building activities

o Developed “sharing the pain” and “flexible hours” practices for remote/virtual team work

o New working methods enhance global Communication, Ideas Sharing and Financial

Visibility

25


GIS Global Culture – Key success factors

What did we learn?

Culture change is an on-going journey!

Soft elements like cultural gaps affect

performance dramatically

Cultural elements can be measured

Managing „culture change‟ as a program

Culture change requires getting out of the “comfort zone”

Teamwork and people‟s excitement

Simple mechanism like “sharing the pain” can have strong impact

Strong sponsorship from top executive team

Communication!! Communication!! Communication!!

26


GISOUR VISION

GIS is a trusted business partner

recognized for delivering innovation, value

and performance

OUR MISSION

Deliver solutions that improve shareholder

value by leveraging leading technology

and best practices

OUR STRATEGY

Capture value by creating a culture of

collaboration and continuous improvement

through a global team of talented IT

professionals


Reporting Segments

DISPLAY

Lowering cost and

improving performance

of displays

ENERGY &

ENVIRONMENTAL

SOLUTIONS

Lowering the

cost of electricity

APPLIED GLOBAL

SERVICES

Optimizing output and

efficiency of semiconductor,

display and solar fabs

through services, equipment

and automation software

29 Overview – Data as of April 2011

SILICON SYSTEMS

GROUP

Pursuing growth in

emerging logic,

emerging memory and

packaging technologies


30

Customer Arena

The focus is shifting to Asia

Where are the customers located?

30

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Technology

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