1. President, Business Unit Leader Cargill Corn Milling North America
Creating and Integrating Strategies to Succeed in Difficult Economic Times
Alan Willits
President, Business Unit Leader
Cargill Corn Milling North America
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Alan’s Presentation for breakout session at Washington State *
Approximately 20 min talk with approximately 40 min questions *
Thank you for inviting me to speak here today. It is a great honor to be here. For today, my discussion will center around how systematic processes are required to succeed in today’s tough economic times.
NEXT Slide - Agenda
WSQA Symposium 2009
CONFIDENTIAL. This document contains trade secret information. Disclosure, use or reproduction outside Cargill and inside Cargill, to or by those employees who do not have a need to know is prohibited except as authorized by Cargill In writing. (Copyright Cargill, Incorporated All rights reserved.)

2. Agenda Strategy Process Annual Business Planning Process
Adjustments to Plan
For today’s presentation my goals are:
to give you a better understanding of our Strategy Process
to explain how we align and deploy the strategy through annual tactical plans
to demonstrate how we can adjust tactical plans based on external forces
NEXT Slide – Development to Deployment

3. Development to Deployment
Strategy Review Process
Annual Business Planning Process
I will start with a high level overview of how Corn Milling accomplishes strategic planning and alignment.
We start with a strategy Review Process, which includes an annual review of our competencies, our markets, and the world we live in.
Next we start the communication, deployment, and alignment of this strategy through our annual business planning process.
Finally, through our individual objective setting, we complete our communication and alignment of strategy with each employee. This final piece happens during our annual performance management process.
The goal of this entire process is to engage each employee and help them understand “How I fit and why I matter”.
NEXT Slide – Strategy Review Process
Performance Management Process

4. Strategic Review Process
Core Competencies
Current Strategy
Annual Strategy Review
Update Current Strategy
Strategic Plan
Market Inputs
Continue with Current Strategy
Design New Strategy
Lets look more closely at the Strategic Review Process, illustrated on the screen.
As I mentioned earlier today, Corn Milling is a complex organization organized around product lines and functions. We do our longer-term strategic planning at the product line level. Our Annual Strategy Review forces us to look at our current operating environment including our current strategy, core competencies, and several market factors including customer needs, technological innovations, global challenges, consumer concerns, etc.
After the Annual Strategy Review, we will make a decision to go one of three directions:
Option 1: Continue with current strategy, no changes are necessary.
Option 2: Update the current strategy. Minor course corrections needed to meet our obligations.
Option 3: Do a full strategic review. Make a fundamental change in the direction the business is taking.
NEXT Slide – Strategy Development

5. Strategy Development “Outside-in” focus… Consumer Customer Competitor
Population Dynamics
Economy
Impact
Health and
Wellness
Product Line Implications
Customer
Competitor
The third option is what we call the “deep dive” and I will further flush this piece out. We have found that we need a deep dive strategic review about every 5 years and performing a deep dive analysis can take anywhere from 3-8 months to complete. When we do a deep dive, we use a McKinsie, team-based approach. We have lot of great people who want to play a part in the direction of the business.
To illustrate our deep-dive strategy development, I’ll briefly you through the methodology used for our sweetener strategy, which covers our HFCS, Corn Syrup and Sugar product lines.
We begin with an outside-in focus. Input from consumers and customers is critical to completing our strategy. We utilize market mapping to further our understanding of:
What the consumer wants and desires, both from current products and potential products.
How our customers are strategically approaching the market and their needs for growth, profitability, and sustainability.
How our competition is positioning themselves in the marketplace.
Where we can create the most value.
NEXT Slide – Obesity Chart
Cargill

6. Obesity Rates 1988 Obesity Levels: Men – 16.0 % Women – 21.5%
We support the market mapping and any qualitative data with factual data. This slide shows the trend of obesity by gender and supports what we have heard from both consumers and customers.
NEXT Slide – Consumer Focus - Weight
1988 Obesity Levels:
Men – 16.0 %
Women – 21.5%
Source: Center for Disease Control and Prevention – 2007 report and National Center for Health Statistics – 2007 report 6 6

7. Consumer Focus Consumers are Increasingly Focused on Managing Weight
75% of Americans are concerned with their weight (compared to 66% in 2006)
69% make dietary changes “to lose weight”
67% are making changes to improve the healthfulness of their diet
From the Market Mapping process we develop key themes. I will identify three of these themes.
First, consumers are increasingly focused on managing their weight either through efforts to lose weight or by improving the healthfulness of their diets.
NEXT Slide – Consumer Focus - Calories
Source: International Food Information Council – 2008 Report

8. Consumer Focus Consumers are Increasingly Focused on Reducing Calories
Types of dietary changes include:
Changing the portion sizes of the meals or snacks (60%)
Reducing the number of calories consumed (57%)
Second, consumer dietary changes are increasingly focused on reducing calories through reduction of portion sizes or by simply consuming fewer total calories.
Next Slide – Consumer Focus – Nutrition Labels
Source: International Food Information Council – 2008 Report

9. Consumers Read Labels Most Frequently Searched on Labels1
Most Frequently Searched on Labels 6
Calories (57%)
Sugars (40%)
Sodium (35%)
Total Carbohydrates (24%)
High Fructose Corn Syrup (21%)
Total Fat (20%)
Caffeine (17%) 3 4 2
And third, because consumers are more concerned about their overall weight and watching calories much more closely, we have found more consumers are reading the nutritional labels on food packaging. This slide shows what consumers search for in these labels and the frequency of the top items.
Next Slide – Customer Point of View 5 7

10. Customer Point of View Growth and Profitability Company Leadership
STRATEGIC
Growth and Profitability
Company Leadership
VALUE ADDED
Technical Insights
Market Consumer Insights
Innovative Marketing
We also supplement qualitative data from our customers with quantifiable data. We gather this data we utilizing a 3rd party survey process that allows our customers to rate our business based on several characteristics in three categories:
Fundamental – meeting the basic needs and requirements
Value Added – utilizing insights to create value
Strategic – Long-term growth and partnerships
This allows us to identify the areas that are important to our customers and where we can provide value.
NEXT Slide – What Customers Value
FUNDAMENTAL
Reliability
Customer/Sales Team

11. What Customers Value Competitor A Leadership Growth and Profitability
Technical Insights
Market / Consumer Insights
Innovative Marketing
Reliability
Customer/Sales Teams
Distinctive (>4.0)
Superior ( )
Average ( )
Problem (≤3.0)
Leadership
Growth and
Profitability
Technical Insights
Market / Consumer Insights
Innovative Marketing
Reliability
Customer/Sales Teams
Competitor A
Our surveys allow our customers to candidly assess our overall performance. We can also compare our performance to our competitors in order to determine where our customers perceive us having a competitive advantage.
NEXT Slide – Quality & Reliability

12. What Drives Customers’ Behaviors?
Quality and Reliability
As a result of all of our data gathering we have identified four characteristics our customers expect from us.
First, quality and reliability are fundamental, they are the table stakes of being in business.
NEXT Slide – New Product Development

13. What Drives Customers’ Behaviors?
New Product Development
Our customers expect us to utilize our insights to help them create new products and services.
NEXT Slide – Supply Chain Efficiencies

14. What Drives Customers’ Behaviors?
Supply Chain Efficiencies
Our customers expect supply chain efficiencies requiring us to optimize resources.
NEXT Slide – Business Opportunities

15. What Drives Customers’ Behaviors?
Business Opportunities
As industry leaders we are looked to for new and innovative ways to create value and sustainability.
NEXT Slide – Strategy Summary

16. Strategy Summary Outside-In Process Data Driven Qualitative
Quantitative
Consumer Input
Customer Input
Distinctive Value
We utilize an outside-in process to get information from both consumers and customers. Our process is very much data driven. We will utilize many techniques to get information – interviews, sales call data, customer service info, surveys, and many other sources. From all of the data collected we will create a strategy to create distinctive value and achieve the expectation of our customers.
NEXT Slide – Development to Deployment

17. Development to Deployment
Strategy Review Process
Annual Business Planning Process
Once our strategy is completed and in place, we shift emphasis from development to deployment utilizing our Annual Business Planning Process. The tactical business planning process within Corn Milling produces over 42 business plans with many initiatives and metrics. The trick is to align these plans ensuring we are all pulling in the same direction.
NEXT Slide – Annual Biz Planning Process
Performance Management Process

18. Annual Business Planning Process
Strategic Plan
Corn Milling Business Plan
Corn Milling Scorecard
Phase 1
Product Line Plans
Process Development Group Plans
Functional Area Plans
Phase 2
Phase 3
Facility Plans
Facility Scorecards
Let me switch your focus to a deeper level of deployment. Once we have our strategic direction set, we then proceed to our tactical business planning process. This annual process incorporates a variety of initiatives that align with our strategic plan. Here, you see a graphic of the process, which, once again, ensures alignment throughout the entire organization.
This annual process starts with the creation of the Corn Milling Business Plan and Scorecard. From this plan and utilizing our product line strategies we create the Product Line Business Plans. From there we create Functional and Process Development Group (our Best Practice Sharing teams) business plans. Finally we create the Facility Business Plans. All of these plans must be aligned by initiatives and metrics before we go to the department and individual level. A Tiger Team facilitates Phase 1 through Phase 3 of the process to ensure this important alignment occurs.
NEXT Slide – Tiger Teams
Department Plans
Phase 4
Individual Key Result Areas

19. Tiger Teams Members Cross Functional Group Emerging Leaders
Responsibility
Follow Process
Assure Alignment
Meet Deadlines
Tiger teams have actually been identified as a significant process improvement by our internal Business Excellence process, which is the internal quality process within Cargill that is modeled after the Baldrige process.
Tiger Teams were developed to help manage and ensure the alignment of the business plans throughout the business unit. However they also provide a development tool for new and emerging leaders to increase their business knowledge.
Tiger Teams are made up of up and coming team members, from many disciplines. They are tasked with looking at all the business plans, making sure all the business plans and facility plans are in alignment with the overall Corn Milling plan and are aligned horizontally as well (i.e. product line to function, product line to product line). Tiger Teams can also share best practices (i.e. a new way to track and measure innovation).
At the same time, you get the added benefit of a deeper exposure and understanding of the workings of Corn Milling in a new generation of emerging business leaders.
Alignment responsibilities include:
all plans in the same format
measures are consistent with the correct ones on the right plans
important initiatives are followed
NEXT Slide – Alignment Process

20. Alignment Process Line of Sight
You will hear us say, again and again, that the key is alignment from top to bottom.
The “magic” of our process, if magic is the right term, is that every one of the 2300 employees in our very large and diversified business unit can readily see his or her piece of the action.
Each level of the organization, from individual to the overall Business Unit, has goals and plans that both feed from, and fuel the levels above and below.
Everyone can see that their individual objectives are in alignment with the direction of the BU.
This helps with engagement, with empowerment, with alignment, and makes the business plan more than an “ivory tower” document that when completed is put on the bookshelf and never looked at again.
NEXT Slide – Scorecard Alignment Model
Line of Sight

21. Scorecard Alignment Model
One alignment technique we use is to segregate all initiatives and metrics into the elements that you saw in our Leadership system: Engaged Employees, Satisfied Customers, Enriched Communities, and Profitable Growth. Measures are established for each of the initiatives , and are published in scorecard form so we can track what is going well and what is not.
These measurement categories are illustrated in our Scorecard Alignment Model. This model is used to identify strategic themes, objectives and measures for our business plans and scorecards.
NEXT Slide – Entire Strategy & Annual Process 21 21

22. Strategy and Annual Planning Process
Current Strategy
Core Competencies
Market Inputs
Annual Strategy Review
Update Current Strategy
Continue with Current Strategy
Design New Strategy
There you have it.
Once again, I would emphasize that our strategy process is not that unique, but rather the implementation of the process, and how we involve our stakeholders, is the unique element.
To review, we involve stakeholders in:
The Strategy teams. Using our “best and brightest” emerging talent.
The “Tiger Teams”, again, talented up and comers who ensure alignment between groups within the BU.
Customer panel discussions, where the voice of the customer comes in, and
The process for ensuring alignment of individual KRA’s to the BU plan.
NEXT Slide – Hunkering Down
Strategic Plan
Annual Business Planning Process
Key Results Areas

23. Difficult Times “Hunkering Down” Gross Investment Capital Travel
Base Salary Freeze
Headcount Control
Learning & Development
Developing your strategy for the future is never easy. No matter how well you interpret your data and plan contingencies, there are times when external events require immediate action. As you all know this past year has provided one of these unprecedented events.
Being a Baldrige recipient certainly did not make us immune to the global economic volatility. In December 2008, shortly after being named a role model, we instituted a Hunkering Down program to lower our overall costs. Some of the actions we took were:
Lowered our gross investment by closing a plant in Decatur, AL. This had been something we were planning to do but the economic conditions accelerated the process.
We stopped all new non-base capital spending and reprioritized all capital spending to only focus on high-return projects.
We reduced travel, froze base salaries, and challenged all headcount increases.
We stopped all new external and internal training.
NEXT Slide – Hunkering Down Employee Ideas 23 23

24. Difficult Economic Times
We asked – “How might we reduce costs without negatively impacting our customers or core business?”
Idea Campaign
2-Weeks
Over 400 Ideas
Many Ideas Implemented
Over $1,000,000 Saved
Baldrige Award Celebration
We also asked our employees for their ideas on reducing costs. Utilizing a 2-week idea campaign through our innovation system we asked:
How might we reduce costs without negatively impacting our customers or core business?
We received an overwhelming response of over 400 ideas. Many of those have been implemented resulting in over one million dollars in savings.
Even celebrating receiving the Baldrige Award was affected. We celebrated this prestigious award by donating over $130,000 to food shelters in the communities where we have a presence. This was done lieu of purchasing clothing or some other memento to commemorate the event.
Next Slide – Journey to Excellence 24 24

25. Summary
In summary, creating and integrating strategies to succeed in difficult economic times takes leadership and systematic processes. Most importantly we feel the key ingredient is involving your stakeholders, employees and customers, in the processes. This results in improved plans, more ownership, and increased engagement.
NEXT Slide – END of Presentation 25 25

26. President, Business Unit Leader Cargill Corn Milling North America
Creating and Integrating Strategies to Succeed in Difficult Economic Times
Alan Willits
President, Business Unit Leader
Cargill Corn Milling North America
I will take any questions you may have.
WSQA Symposium 2009
CONFIDENTIAL. This document contains trade secret information. Disclosure, use or reproduction outside Cargill and inside Cargill, to or by those employees who do not have a need to know is prohibited except as authorized by Cargill In writing. (Copyright Cargill, Incorporated All rights reserved.)