5th September 2012 DOVISTA’s “Living Future …nff.dk/f/papers/dovista.pdfQMOD paper, DOVISTA...

QMOD paper, DOVISTA presentation 5th of September 2012 1

QMOD 2012 Conference 5th September 2012

DOVISTA’s “Living Future Excellence”

- a well begun journey with many more destinations to reach…

Kurt Bering Sørensen, Stig Romlund, Finn Jespersen, Finn Hansen, Henrik Jesper Hansen, Jacob Schytz Frandsen, Torben Hundevad, Trond Fidje, Preben Fogh Svendsen and Niels Gørup Christiansen

- The DOVISTA Management Team

Company Background: DOVISTA is the parent company of a group of window and door businesses in Northern Europe, operates in 10 countries and employs 3300 people in more than 50 business units. DOVISTA is owned by VKR Holding A/S

“Distinctive Brands – Shared Excellence” is the foundation for the business strategy. The market for vertical windows is adapted to local and national requirements, which means that distinctiveness is one of the major strengths promoted and cultivated by DOVISTA. In the value chain some processes are centralized, not being tied too close-to-market locally, but are reinforced by international collaboration. For these centralized processes the aim is to build shared competencies and synergies – also called Shared Excellence. The aim of “Shared Excellence” is to create a unique combination of economies of scale and intra-group knowledge-sharing - together with direct and indirect synergies in selected areas.

Living Future Excellence: To strengthen the “Shared Excellence” DOVISTA has developed a shared language and deployed shared methods for continuous improvements across all companies. This number one “Must-win- battle” was initiated in March 2010 by the CEO, and is called Living Future Excellence.

DOVISTA has now been through 5 half-year improvement cycles of Future Excellence covering more than 95% of the group. The result is 1400 accomplished projects with an accumulated bottom line effect of 250 million DKK – equal to 33 million Euros. This result has been realized through a “People’s movement” with a parallel development of objectives, competences and a culture for continuous improvements at all organizational levels. We call it “Living Future Excellence Volume 1”. The improvement process is managed through very stringent half-year cycles. The basic content of the cycles will be described, as well as reflections on the conscious design and the subsequently evolution will be reported and discussed in this article.

The management team, as well as employees, is proud about what has been achieved but not satisfied. There are more destinations to reach and conquests to achieve. These aspirations are called “Volumes”, which at the end of the paper are presented as follows:

-‐ In “Volume 1” we have achieved yearly reductions of quality costs equal to 2%. -‐ In “Volume 2” we will create steady productivity gains of 5% per year. -‐ In “Volume 3” we strive for Business Excellence leading to 16% in EBITA. -‐ In “Mega Potentials” we express the great opportunities connected to structural

changes and offensive opportunities across DOVISTA.


0. Summary

The paper is a case story about DOVISTA - the parent company of a group of window and door businesses in Northern Europe that operates in 10 countries and employs 3300 people in more than 50 business units. DOVISTA is owned by the family foundation VKR Holding A/S

DOVISTA has for many years tried different approaches to “continuous improvement”. For sure in some areas with quite reasonable success – but never as a shared system and culture. “Distinctive Brands – Shared Excellence” is the foundation for the business strategy of DOVISTA. After strongly needed restructuring initiatives, following the Finance Crises it was obvious for DOVISTA Management Team that the group compellingly needed continuous improvement to ensure a long term survival.“Shared Excellence” should be given actual presence. The people of DOVISTA should move out of the perception that the crisis would disappear. The people had actively to see and realize improvements now - and forever. In the paper the DOVISTA critical business and organizational challenges for a continuous improvement are described as the DOVISTA Management Team perceived them. Based on their perception, the actually decided and designed continuous improvement program is described. The paper is a description of this specific, but in general critical design process of a continuous improvement initiative. The continuous improvement program of DOVISTA is called “Living Future Excellence”. “Living Future Excellence is decided by DOVISTA Management Team to be the number one strategic “Must-win- battle” of DOVISTA and was initiated in March 2010. Hereby some distinctive characteristics of “Living Future Excellence”:

-‐ A sharp focus on quality with the purpose of being the clear quality leader in our segments. -‐ An expectation for every process and every area to see at least 20% of the cost base as

quality costs - and reduce that with 10% i.e. 2% of the cost base every half year. -‐ Realization of reductions and improvements through a half yearly improvement cycle. More

than 50 areas and units realize this through their own 5-15 100-days-projects. 5 cycles now has led to 1400 improvement projects. They are balanced between two types of improvement projects: - harvesting projects with a documented accumulated bottom line effect of 33 million Euro- - seeding projects leading to improved insight and infrastructure

-‐ The cycle is run with a very limited amount of shared templates and simple tools - just 7. -‐ An empowered “peoples movement” without specialists as full time employees. -‐ A transparent and positive competing environment in the DOVISTA group, where all

processes, results and projects are visible for everyone. -‐ A strong focus on “the will to execute” and practical and specific improvements

The DOVISTA Management Team, as well as employees, is proud about what has been achieved but not satisfied. There are more destinations to reach and conquests to achieve. The “Living” element is crucial and the organic growth of competence, organization and results are described.


1. The Beginning of the “Future Excellence Program” At the beginning of 2010 DOVISTA – like many other companies in Northern Europe – was ready for a step two after the first Financial Crisis. “Step one” was for most companies quite obvious and straight forward: Tough cost reductions and downsizing. In DOVISTA that was framed in the “Plan100” and later ”Plan2010”. Both plans carried the classic characteristics of downsizing: short-term effect, turn around, and top-down approach.

When ready for a “Step 2” - what should then be the purpose, objectives and actual content? It was not clear. Hopes and fears were scrutinized among the 11 members of the DOVISTA Management Team. Challenges and risks were evaluated based on earlier internal experiences. Dilemmas and concerns were discussed again and again among the DOVISTA Management Team members and other key players. The result was a list of critical challenges:

a) How to overcome a general attitude and habit among leaders and key people that all problems and all waste occur in earlier processes and other departments, not in their own? Most leaders repeatedly requested for improvement initiatives from internal suppliers – and when problems were not solved, they gave up and gave the task to the DOVISTA Management Team.

b) How to overcome a self-confident culture that was a result of… - a stable, civilized and patient ownership - a strong and stable market position over many years in most business units - a window industry that, compared to other industries, is mediocre The self-confidence led to a quite arrogant behavior against the customers.

c) How to develop a “strong management commitment” - and at the same time stimulate an “organic growing people’s movement”, which in a meaningful way will lead to 16% in EBITA in 2015 and a much more exciting work place wherever people works.

d) How to execute fast measurable results in order to maintain motivation - and at the same time explore new opportunities for later realization?

e) How to give more life to “Distinctive brands - Shared Excellence”; the foundation of the company’s business strategy? That should be done in a way that pays respect to the meaningful cultural and environmental differences among the many different acquisitions performed during the last 10 years.

f) How to create a language for sharing – a language broader than that known from window technology and finance. A language that actually will give transparency across DOVISTA – and thereby enables healthy cross-organizational learning and competition.

g) How to become “the clear and distinctive quality leader and the preferred choice” in every one of our business segments in an industry that is conservative, slow and quite price-oriented?

h) How to improve business processes – without introducing an overwhelming toolbox that may spoil further organizational growth and people’s self confidence about own change capacities? And how to dig even deeper: How to change the company culture and lifestyle in the direction of pro-activeness, eagerness for quality as the highest priority and a relentless strive for continuous improvements?

i) How to overcome a broad cynicism in the organization based on the fact that previously “continuous improvement programs” have never been successful, and continuous improvements had never been conceived as part of the competitive advantage of DOVISTA.


j) How to move the attention and the acknowledgement internally from “fascinating strategy building” and “high-level thinking and presentations”, to people and teams that through humble, hard and honest work relentlessly create steady improvements leading to competitive advantages

In most parts of DOVISTA, the company culture is very practically oriented. A strong positive element in the DOVISTA culture is an honest and very close contact to reality and a strength in high speed realization of agreed decisions; “a will to execute” and “a controlled impatience” as often stated by core people. Obviously, we should build on these strengths.

In general, people are wise in terms of common sense and skepticism regarding heavy loaded theoretical concepts, and external experiences from other industries are often perceived as irrelevant. After a lot of interviews with dozens of key employees and several meetings and discussions in the DOVISTA Management Team, the purpose, the principles and the relevant toolbox gradually appeared. Not as a result of heavy intellectual considerations, but more as a result of “talking, doing and learning”.

We will in the following present the insights and decisions that appeared, by referring to the list of critical challenges presented above.

The “lean concept” was perceived as a “heavy loaded theoretical concepts”, and therefore the Management Team decided to give all attention to quality and cost of poor quality costs (=quality costs) – or the muda (= waste) parts of the 5 lean concepts. Managers and employees were not certain about this decision. However the convincing argument was that it was visible for everyone that we had clear facts on lack of customer satisfaction, problems in the market which was caused by persistent leak, lack and misunderstandings across our whole business system.

To communicate this, DOVISTA wanted to run its own program that should fit its own challenges and competencies. We decided to give the program its own name – with low association to other companies or other known concepts. We want to enable ourselves to decide the purpose, the content and the organizational architecture for the program.

We decided to name the program “Living Future Excellence” or just “FutEx”. We used “Future” to emphasize that most opportunities are still and always in front of us. We used “Excellence” because it is always worth striving for, and never should be expected to be achieved for more than a few days, hours or minutes. “Excellence” was fine because it reflected many discussions with too much focus on fulfilling specifications based on outdated acceptance levels - and too little focus on humbleness and hard team work with the purpose of fulfilling customer expectations, for “always better” and for extraordinary performance. By using the name “Excellence” we also took out departmental and personal associations related to other names like i.e. “Quality”. To further stress the need of practicing, doing and moving we put in the word “Living”. We wanted to go for a learning organization, growing through insights and experiences.

It was obvious that we needed to perform a “field test”. “Grey is all theories – Green is the forest of life”. We decided to focus on 20 areas – focusing on sites and processes in Denmark, England and Poland. The field test was called “Volume 1.0”, indicating that this program would continue with new volumes. This was the start (1) and it was a test (0). In the next section we will describe how we performed the field test.


2. Vol. 1.0 – A Field test and an experiment

At a meeting on 20th February 2010 the plan was introduced at a meeting to approximately 25 people placed in the Danish organizations of DOVISTA – primarily in the Strategic Business Units of VELFAC and Rationel. Soon after it was obvious that we should have invited our Polish and English colleagues to the meeting as well, and we had to spent resources to bring them on board. The 20 areas covered all important business processes: Innovation, Sales, Capacity Planning, Procurement, Production, Logistics, and Service. Initially every one of the 20 areas performed an “analyzing day”, with participation of 3-10 people in the area and a facilitator provided by DOVISTA. The program of the analyzing day was…

1. Short general presentation of participants and area in scope 2. Presentation of “Living Future Excellence Vol.1.0” 3. Map the key processes of the area 4. Identify internal or external waste equal to 10% of activity level as the initial cost base 5. Assess the “Quality Information System”, to measure the learning level of the area. 6. Every area developed a list of possible improvements, and decided 5-15 improvement

projects to be achieved in max. 100 days, leading to min. 1% reduction of the cost base, through elimination of waste.

7. The day was closed by a sign-off and photo session of the participants. Every aspect in the above mentioned list of critical challenges a) –j) was deliberately but informally and very practically approached through the day. We did not necessarily say it loud – we just did it. We had prepared different but specific ways of addressing each of the challenges. Hereby some simple few examples which could be expanded into many chapters…

- We introduced each analyzing day by stating that the purpose was to identify and decide improvements of own processes in own areas of responsibility. No talking was allowed regarding “the failures of rest of the world”. Thereby we addressed a)

- We identified in every area through the day more than 10% of the cost base as Quality Costs – or just waste. Thereby we addressed b)

-‐ We assessed the level of organizational learning related to failures and not intended incidents, by using an EFQM inspired framework called “Quality Information System” and by giving a score using an EFQM - RADAR inspired tool. In that way, we addressed complacency and created transparency across DOVISTA. Thereby we addressed b), f) and g) at the list of critical challenges.

-‐ We requested in every area not just harvesting projects leading to good fast results, but also seeding projects that enabled harvesting on a longer term. Thereby we addressed d)

-‐ We placed all results on the portal. Thereby we addressed f) Each analyzing day facilitated identification and decision of 5-15 improvement projects, committed bottom-up for execution in 100 days. The analysis days resulted in a total of 220 projects with an annual bottom line effect of DKK 35 million.


After approximately 50 days the area received a “mid-term” examination called a “follow-up”. An external consultant visited each of the 20 areas. Through a long day he met every project leader that initially delivered a 15 minutes presentation of his project. Afterwards the consultant gave his feed- back and advice - and also scored the project leader from 1-7. That was a clear change in culture to receive a feed-back and a specific score in that way. After 100 days every area and every project leader again received a visit from the consultant – this time called “closing”. The closing processes in September 2010 documented a financial improvement as expected. It was evident to the entire organisation that it was possible to realize dozens of concrete improvements in parallel with DOVISTA’s daily businesses through a people’s movement. See figure 1 in the Appendix. A people’s movement is by nature out of management control. We used the modern pedagogical approach for teaching children to learn how to write a story. Spend the attention to get the children in love with telling and writing the story – and do not care about spelling. Spelling comes more or less automatically when you have a passion for telling and writing stories. We facilitated the same approach for our people and our projects. Our project specification template was just some few key words on an A4-page, and we just helped people with deciding themselves what to be done now – and inspiring them in their love for change and passion for the improvement projects defined by themselves. Consequently, the quality of the projects was very different – and we accepted that as long as a passion was in place. It was obvious that everyone felt like more. People liked the frame work for getting concrete and practical work done - and management liked the results and opportunities to attack the mentioned critical challenges a) to j) in an elegant way. One said: “some like the process, others like the results – together it works for all of us” At the DOVISTA Management Team “FutEx steering committee meeting” late May 2010, it was decided that “Future Excellence Vol. 1.1” should be prepared for start-up on 1st October. At the same meeting the process was finally given the name ”Living Future Excellence”. It is common knowledge among industrial companies that most companies fail when they introduce a programme for continuous improvement – and that even a good introduction is not a guarantee for a good continuation of a “continuous improvement” program. We were aware that the second cycle would be difficult. We wanted so strongly a successful second cycle, and we were aware that the key tool would be “a collective life style change” that would take years – and thereby much longer than a second half year improvement cycle. . The members of DOVISTA Management discussed frankly again and again the threats – but were also enthusiastic about the many opportunities. The basic principles for developing Vol. 1.1 were inspired by a deep believe in the “Living” element in Living Future Excellence. One may say that the evolution theory unconscious inspired us:

-‐ The used concepts and basic tools that have led to success in Vol.1.0 should be the “point of departure” for Vol. 1.1, and enable continued practical production of real improvements. The used concepts and the basic tools of Vol.1.1 compared with 1.0 were not to be modified more than the areas, factories and business units were still able to “see the genes” from Vol.


1.0. We should only accept an understandable level of “natural variation” between Vol. 1.0 and Vol. 1.1

-‐ We encouraged variation in application of concepts and tools across DOVISTA - and ensured natural selection within the environments trough a high level of transparency and in formal competition. We simply measured results on all projects to ensure the survival of the fittest methods, processes and projects.

More specific the key modifications in FutEx Vol. 1.1 compared with Vol.1.0 were:

- Local Management Teams should demonstrate a higher degree of active leadership in the 20 units, for example by consistently expecting that... - at least 20% of the cost base was visible as waste leading to a high visible potential, - at least 10% reduction of the 20% waste every six months, meaning 2%. - a much higher rate of participation among employees and an increased scope by the participation of Natre in Norway and Rationel in the UK

- The two external consultants was replaced by a BIO – a Business Improvement Officer, who as the only person in DOVISTA spent his full time on the Future Excellence program

- 17 particularly respected and change-oriented employees were trained in 6 days and tested in discovering waste and quality costs, carrying out QIS-assessments and executing improvement projects. The employees are called “Future Excellence Drivers”- or just FEDs. They spend approximately 20% of their time on Future Excellence

- The FEDs performed the “Follow-up” and the “Closing” instead of the external consultant, but following the same approach as described above for Vol.1.0.

- The DOVISTA Management Team was trained for three days in August 2010, and at the same time developed the document ”Shared Direction and Objectives” – see next section 3.

- Communicate a half-yearly cycle – see section 4. Everyone was ready for Vol. 1.1 – and the intensive preparation paid back. Close to 300 projects were realized - with an annual effect of 71 million DKK – of which 39 million DKK had provable bottom line effects. The driving force behind the improvements has been enthusiasm at all levels in all of our units. The core was the FED’s.


3. “Shared Direction and Objectives 2010 - 2015”. When creating change we obviously need a “sense of urgency”. It gives motivation for leaving the existing position – but does not give the strongly needed common picture about what to reach and what to achieve. Through creating the document Shared Direction and Objectives 2010 - 2015 the DOVISTA Management Team clarified its own, shared purpose and aspiration for Future Excellence. The negotiation and discussing process itself led to a lot of consensus and agreement of the actual point of departure and what to do now and later. It dealt with three sets of objectives, 1. Qualitative objectives

2. Quantitative objectives, 3. Cultural objectives.

These objectives form the platform for achieving a 16 per cent EBITA in 2015, in order to create the leading Vertical Window Group. With a clear edge and perhaps a bit of provocation, it addressed the critical challenges a) to j). It is intended to be done in a way that “collectively gives inspiration and transpiration that result in admiration”. The incentive program for the DOVISTA Management Team has since 2011 been connected with “Shared Direction and Objectives 2010 – 2015” in a requiring and inspiring way. The Objectives are located in several geographical places, in several language editions and in several versions and include local management teams. It communicates the top management’s commitment for “Living Future Excellence”, at the same time communicating the direction and objectives, as indicated by the name if-self. The compliance with and content of the “Shared Direction and Objectives 2010 – 2015” are being evaluated on a continuing basis. 4th version is expected to be finished on 4th September in Poznan.

In the Appendix you will find “Figure 2 – Shared Direction and Objectives 2015” Being inspired by the “Evolution Theory”, we decided to live “Living Future Excellence” in a way where we more or less accepted all kinds and levels of improvements as long as:

- We experienced positive intentions and personal growth among the operational leaders, the “Future Excellence Drivers” and the project leaders

- We saw reduction of at least 10% of waste or quality cost amounting to at least 20% of the cost base in the 100-days-improvement projects in each area.

Again and again we asked for support, and empowered people to move themselves and their own processes from the current situation in the right direction. We gave power to people that focused on “a) point of departure”, “b) right direction heading for a clear objective” and “c) good progress based on a) and b)”. We deliberately diminished focus on high flying theoretical people and solutions which led to the precise long term goal and the precise master plan to achieve the goal.


We supported “movers” more than “speakers”. We supported pragmatic, decentralized evolution instead of dogmatic, centralised revolution. As stated above The DOVISTA Management Team really strived for the success of the second cycle of Future Excellence. Nevertheless a natural frustration was expressed during the process by members of the DOVISTA Management Team, as they became impatient to “create improvements and hard savings here and now”. But collective life style change takes time and evolution takes time. A consensus emerged as a member of DOVISTA Management Team summarized: “We have to be patient as long as we – as it was the case with Vol.1.0 – get such a fair interest and return on our investment in practical hands-on 100 days improvement projects”


4. The Improvement Cycle of Future Excellence... A crucial part of the communication is that we will continue our journey for continuous improvement. Therefore “the improvement cycle” has been an important tool. Slightly and carefully the cycle has been changed and continuously improved based on experience, sharing and learning. Below you will find the latest version. In the Appendix you will find Figure 3 – The Living Future Excellence Cycle. Each cycle lasts six months and each cycle is called a “Volume”. Each cycle follows the same phases and contains the same tools. To the left you have the phases, time, activity and keywords. To the right you have the important principles, tools and templates. The cycle consists of the following phases, which is in accordance with the descriptions given for Vol.1.0 and Vol. 1.1

1. Set goal and objectives for the cycle – and Future Excellence 2. Prepare through training, portal development and communication 3.1. Identify waste – or quality costs. See the potential as min. 20 per cent of the cost base 3.2. Evaluate the learning associated with the waste; QIS-assessments. A Quality Information System evaluation is carried out giving an international benchmark on a 1000 points scale. The target is a 60 points progress per cycle. 3.3 Select improvement projects to be carried out in 100 days. Within each area there are typically 5 to 15 “seeding” and “harvesting” projects. The projects must in total generate a reduction of at least 2 per cent of the cost base – hereof minimum of 1 percent hard savings. 4. Carry out, Follow-up and Close: After approx. 35 days and again after 100 days each project and each area will be evaluated on a 1 to 7 scale by an external, educated colleague; a FED. The result of each project is formally approved by a ”Closing report” after 111 days. 5. Evaluate the whole cycle for learning for the next cycle.

Good questions have frequently been asked, and we will try to answer them:


Why is a cycle needed? What is the purpose of such disciplined regime?

When the cycle is given as a given circumstance not for open for discussion, you have eliminated many formal, complex and often quite political discussions regarding “when”,” what” and “how”. You are given a shared routine and a shared language, a frame so clear and simple that everyone is able to focus on his real points of attention, his actual areas of interest. In other words, when the cycle is given and granted, you as an organisation, as a team and as an individual are able to maximize your attention on delivery of content and results – not wasting time on pseudo- academic discussions on templates and processes.

We are surrounded by good cycles in our lives: yearly business and budget processes, yearly birthday celebrations in our families, yearly meetings with old friends - and life itself of course. Each cycle has a different content, meaning and purpose for each of us – also through life. Just like that, our half-year FutEx cycle gives stability and predictability to put focus on content.

To conclude briefly: The regular form of the Future Excellence cycle releases energy for creating real change by giving collective coordination of time, language and tools for insight and improvements. The practical routine and habits diminish hopeless discussions on when and how – and give all needed freedom in every area to adapt and adjust to one’s own situation in the specific focus.

Through the cycle every area executes “100 days projects”. That has led to the next often raised question: ”Why should project be run as “100-days projects? It seems quite arbitrary and artificial.

The simple answer is: For the same reasons as given for the cycle. But further reasons can be given.

One reason is that when deciding on the typically 5-15 improvement projects, the local management team and the local FED’s go through a huge calibration, aligning and decision process where they are supposed to reduce from 25, 50 or even 100 competing ideas to the just 5-15 projects achievable. Each project has to be shaped and scoped for realization in maximum 100 days. The process of identifying, prioritizing and specifying the projects creates a common mobilization and a spirit of “let us get the work done”. The speed of change thereby increases through the collective expectation that things must be realised in 100 days. Another reason is that leaders are given an inspiring framework for mobilization and action, where they can benchmark themselves against previous cycles, against colleagues’ performance and against own expectations which enable the individual leader to improve oneself. Finally, with the present market conditions, the complexity of our projects and our intellectual capacity, perspectives longer than half a year or even 100 days often do not make sense. The world economy is so volatile and market conditions are so unpredictable that the ability to adapt and execute fast is much more important, compared to previous times. The 100 days improvement projects address that in a direct way. However sometimes we also get questions about the cycle where we cannot give a reasonable answer. When the pressure is high enough, and time is right, we invent solutions, tools and rules that give the wanted reasonable answers. In that way it is obvious that Future Excellence is not static but a living and growing lifestyle.


Here follow five examples.

- After Volume 1.1 the CFO, BIO and DOVISTA Management Team defined very strict and simple rules for ensuring actual ownership of a realized 100 day project. The practical consequences of the realized project should be approved in operational and financial terms through approval of the viability of the change and approval of achieved savings. Therefore, every realized 100 day project has on day 111 a “Closing report” with signing-off by the area manager, the local finance person, the local FED - and the operational leader, who have to live the result.

- In Vol 1.0 and Vol. 1.1. we solely have projects restricted to areas – as described in a) on page 2. Before Vol.1.2 it was obvious that we should run more projects across the different areas – meaning functions and geography. Therefore we invented the concept of “Partner Project” which means that two or more persons agree themselves – without the intervention of top management – to run a decided and defined 100 day improvement partner project together. To get this fully deployed has been a continued struggle – and we have still a lot of things to do before the concept is deployed in accordance to its full potential

- After Vol.1.2 it was clear that we had several FEDs that had capability on behalf of the DOVISTA Management to run projects across the whole group and to assist the BIO in training the overall organization. Therefore we developed the FEDX team and trained them in 6 days. They spent 30% of their working time on FEDX and solved some of the most complicated projects across the group.

- Before Vol.1.3, it was clear that we lacked the active involvement of many department leaders. Therefore we developed a 2 days “Living Future Excellence” training program for leaders. That has since been more or less obligatory for all leaders and has led to acceleration in many areas

- In Vol. 1.5 we created frames, logic and systems enabling every area to address the three main strategies of DOVISTA

As described, Living Future Excellence is driven based on the same cycle and the same model and structure in “all” parts of DOVISTA. The organisation consists of the following 7 parts:

- The DOVISTA Management Team (DMT) is the Steering Committee. DMT decides objectives, direction, plans and framework, through monthly meetings led by the BIO.

- The Area Leaders and their people are responsible for their own processes and results - The FEDs act as change agents and work with colleagues and their own manager - The appointed project leaders in every area realize the defined projects - The FEDXs train FED candidates and solve complex cross-organizational projects for DMT - The Finance people at all levels ensure a high quality for savings and building ”bridges” - The Business Improvement Officer (BIO) organises, educates, whips, facilitates, evaluates


5. The results of Future Excellence... We are proud of our results so far, although we know that we still have a long way to go. In our presentation in Poznan we will describe the basket of the enabling and resulting KPIs. The conclusion is that since Vol. 1.0 we consistently, through hundreds of projects run by our people, have harvested 2% reduction in the cost base – and in parallel have seeded for the next cycles. Probably the most important part is not the nice and needed short term savings – but the long term oriented development of the culture and organisation. We are sure that, if we are able to hold momentum, this will enable us to reach much more. The production of results in the short term and the concrete improvements give access to the future of Future Excellence. For most people in our group the positive impact of Future Excellence is not “the savings” but the opportunity to solve practical issues and concrete problems they have been struggling with for years. By Future Excellence the good change-oriented people have the license to improve – independent of hierarchy and tradition. To communicate that, the DOVISTA Management Team requests and communicates “story telling” – one specific project from every one of the more than 50 areas. In the Appendix figure 4 you will see a compilation from 14 different areas of DOVISTA.

When we evaluate the result of Future Excellence, the point of reference must be “Shared Direction and Objectives 2015” and the points a) to j) on page 2, we must compare point of departure in March 2010 with our strive for 2015 and the actual results in September 2012. We have evidently and measurably achieved progress through Future Excellence in all our three sets of objectives – qualitative, quantitative and cultural. We are aware that a “change in lifestyle” like Future Excellence takes at least five years before we can rightly claim that FutEx is a fully incorporated part of our everyday life and organization; in our DNA so to say. Therefore the demand for results in the short term are even more important – both in terms of the need for concrete improvements and in order to ensure that execution behaviour is a focal point for every person in DOVISTA Through Future Excellence we again and again bring people out of their comfort zone. It also has a price. In some areas we have experienced a decline in employee satisfaction, an increase in stress and people who did not appreciate the many changes have left the company. We do our best to discuss that in the relevant organizational areas.


6. The Future... It is the perception and position of the DOVISTA Management Team that “Living Future Excellence” is the most important “Must Win Battle” both in the short and the long term to ensure profits above average in the vertical window industry. Our way into the future will be based on a steady focus on “The critical list of challenges a) – j)” presented on page 2. We have from the very beginning wanted to lead, stimulate, train, and support every man, every team and every organizational area to see and do their work. One may say in short that we just “empower” our people. Our road to the future is not strictly based on any specific theoretical scholar – but we are primarily based on our own experience and secondarily inspired by people like Grundtvig (founder of the folk high school), Peter Senge (the Learning Organization) and the Dahlgaards (“involvement of everybody” and “Total Quality Management”), as well as we also find inspiration in the EFQM Excellence Model. There will be three main journeys towards 2015. Perhaps “2015” is too precise and ambitious, but it stimulates eagerness and motivation for action. The most important is that we create reasonable results on our way and move in the right direction at good speed – just as expressed through “Shared Direction and Objectives” and through addressing the critical list of challenges on page 2. The first main journey, Volume 1, focuses on improving quality and reducing quality costs and waste in the broadest sense. We are probably in the middle of that journey. With every cycle we strengthen and improve our attitude, our tools and our execution. As part of that, we decided for Vol.1.5, starting week 36 2012to require improvement projects in every area reflecting our three main strategies: 1) Quality cost reduction, 2) Increased sales 3) Change-the-game initiatives. We are deliberately not specific, because we want things growing out of real people’s real competences. As described we are now at a basic level, giving approximately 4% of cost base in a yearly bottom line effect. The second main journey, Volume 2, will focus on total productivity. The methods and principles of Volume 1 will be integrated in Volume 2, and it is expected that the different areas will arrive at Volume 2 at different times. The timing and the main phases of Volumes 1 and 2 will be the same, and thereby we ensure a smooth transition. We expect yearly total productivity gains at a level of approximately 8%, by focusing not only on the highest priority of quality, but also on lead time, total costs and a practical use of the lean tool box. The third main journey, Volume. 3, will focus on Excellence. Our purpose of running DOVISTA is not just to have high quality (Vol.1), to create high total productivity (Vol.2) – but to satisfy our key stakeholders: Customers, Employees, Society and Shareholders. This is the purpose of Volume 3 that will lead to above 16% in EBITA. Clearly, the EFQM-Excellence model will be our inspiration. As part of the preparations the DOVISTA Management has been introduced to the principles of Excellence and evaluated against world class in leadership, customer results and business results.


In parallel we will see, plan and realize what we call “Mega potentials”, meaning big ”game changes”- across many functions, entities and businesses. Examples are:

- Transfer of job functions from one country to another - Moving of the manufacturing base - New product platforms - Break through innovations - New ERP platforms

We are not in a hurry to go into Volume 2, 3 and mega potentials. We are ready to take the needed time. We are only in a hurry for “Living Future Excellence” every day. We experience it in the same way as Santa Claus gives gifts every Christmas – but our process gives all of us gifts every day – in terms of learning, money and more satisfied customers. We are proud of our achievements so far. But we also know that we still have a long way to go. Therefore, during the days the management team is in Poznan and at QMOD we will open our eyes and ears for inspiration for the future life in our “Living Future Excellence” program.


Appendix Figure 1 – People’s movement


Figure2 – Shared Direction and Objectives 2015


Figure 3 – The Living Future Excellence Cycle


Figure 4 – Result posters

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