Creating a new corporate culture is not a simple task, but it is
one that Caterpillar Inc. has chosen as necessary to assure the
future leadership of the company. Sales and revenues topped $36
billion in 2005 for the world's leading manufacturer of
construction and mining equipment, diesel and natural gas engines,
and industrial gas turbines. And the company proclaims it is
"driving positive and sustainable change on every continent."
Caterpillar's goals for 2020 center around aggressive growth and
increased profitability by going into new geographies particularly
in Asia, adding new product lines, and being more entrepreneurial
than in the past. The company, however, faces the challenge of the
pending retirement of older employees. It also must be able to hire
new employees in the regions of the world where Caterpillar is
experiencing the highest growth.
Vision, execute, legacy
Caterpillar estimates that it will need to hire the equivalent of
its current workforce by the year 2020 as it grows to 120,000
employees. Working with the company's executive leaders starting in
2001, Caterpillar University defined the leadership characteristics
(or competencies) required to achieve Caterpillar's 2010 goals for
the company's 8,000 leaders - supervisors, managers, department
heads, and executives. Caterpillar is revisiting these competencies
to ensure they are still relevant, and the company is on track to
meet its goals for 2020.
To put in place the leadership "language" it created in 2001, the
company worked with an outside consultant to launch The Caterpillar
Leadership Framework. Through a program called Making Great
Leaders, Caterpillar emphasized three leadership competency
clusters designed to instill a Vision of success, build the skills
to Execute the vision, and assure the creation of a Legacy through
developing future leaders. The MGL program is a highly interactive,
two-day event in which leaders receive feedback on their leadership
via assessment tools that focus on competencies, styles, and
climate. Leaders are given time in MGL to create development plans
and receive individual coaching. MGL cascades from the top of the
company to front-line leaders, with Caterpillar's CEO and top
management participating as well. The CEO provides continued
sponsorship by asking all managers and above to participate in MGL
by the end of 2006.
Accountability of leaders
By the end of 2006, the majority of Caterpillar's 2,500 managers
will have participated in MGL, along with hundreds of the company's
front-line supervisors. Measuring success and holding leaders
accountable are important parts of the company's new "people"
strategy. By 2010, the goal is to have 80 percent of employees
engaged in the new culture and have 80 percent of leaders possess
new leadership competencies. Engagement and leadership are measured
each year through an employee survey. It measures the progress
toward the 80 percent targets. Both of those goals were above 70
percent as of early 2006 which is more then a 20 point improvement
over five years ago.
Chris Arvin, Dean of Leadership, Caterpillar University says, "This
is a prime example of our leaders becoming serious about leaving a
legacy by actively developing themselves and teaching others.
Leadership development has become a critical element of
Caterpillar's strategy and its importance is recognized if
Caterpillar is to reach its goals for 2020."