SAE International Organization

Annual Leadership SeminarJanuary 25, 2002

Purpose

History of AssociationsSAE ProfileStructureTrends Changing AssociationsStaff RoleMember RoleOperating Board and Committee Overview

Associations

Trade Professional

Company Driven Individual Driven(Common Interests)

Serving Public Interest

Enhance economic, social, and political climate (country world) Desirable atmosphere

Trade Associations

ProfessionalSocieties

Japan

AncientChina

India

Egypt

Scientific Society(Naples, Italy)

Organized 1560

American PhilosophicalSociety

(Philadelphia, PA, USA)Founded 1743

Professional Associations are a manifestation of organized

volunteerism

Information Sharing

Vehicle/medium through which specialists in given fields share their expertise/experience to advance particular field.

Evolution of an Association

New Emerging Developing Large

Society ofAutomobile Engineers

Society ofAirplane Engineers

and Tractor Engineers

SAEInternational

Serving members and automotive industry

Profile

Individual memberships based on education and experiencePublisher and distributor of technical literatureWorld’s leading resource for mobility technologyNon-for-profitNo lobbying

Corporate/Stockholder Structure

E m p lo ye es

C E O C o m m itte es

B o ard o fD ire c to rs

Association Structure

President & Board

Committees,Program Offices

Exec. Vice Pres. & Staff

Operating Board

Operating Board

Operating Board

Operating Board

Operating Board

For-Profit Decision Making

Boss

IndividualDecision Making

Subordinates

Hierarchy

AssociationConsensus Decision Making

Committees/Teams Make Consensus Decisions

Decision Making-Comparison

Boss

IndividualDecision Making

Subordinates

Consensus Decision Making

Chair

5 Key Trends Changing Associations

1Change in the nature of change itself2 Increased demand for outcome

accountability3Volunteer members’ life style changes4Technology advancements5Globalization

5 Key Trends. . . Rate of Change

1900 1950 20000

5 Key Trends. . .Change in the Nature of Change

Rate of change is increasing dramatically.Change is here to stay.Successful leaders demonstrate flexibility.September 11, 2001Roles of OEMs/Tier 1s

SAE’s Response. . . Change in the Nature of Change

SAE’s Governance Process enables rapid response to change: Flexible structure Knowledge-based decision making Empowered operating

boards/committees

5 Key Trends. . . IncreasedDemand for Outcome Accountability

Focused on resultsCustomer needs drive changePerceived and real benefits are assessed What’s in it for me?

Board’s focus on assuring achievement by OBCs and staff

Standards

Networking

TechnicalLiterature

TechnicalConferences

ProblemSolvingSessions(TOPTECs)

LeadershipSkills

New Products

Cost

Reduction

ImprovedQuality

ProcessImprovements

Standards

ManagementSkills

ENGINEERS

COMPANY

SAE’s Response . . .Increased Demand for Outcome

Accountability

5 Key Trends . . .Less Time From Volunteer

Members

Increased complexity of work and lifeCompetition for discretionary timeCompetition among not-for-profits for talented volunteers

SAE’s Response. . .Volunteer Members’ Life Style

ChangesBoard of Directors selected “Changing Member Needs” as a strategic issue in 1997. Board of Directors identified eight factors influencing the changing needs of members.Board of Directors requested all operating boards/committees to modify their Relationships Policies of the Board Governance Manual to include diversity.Workshop on Transforming SAE into a Knowledge Providing Society was conducted in 2001.

Volunteer Members’ Life Style Changes

“Crave” New Information

Want Interactiv

e

“Experience”ProfessionalDevelopment

ManagementSupport

ElectronicCommunication

5 Key Trends . . .Technology Advancements

Communication technologies are changing the way we do business Internet CD-ROM Video teleconferencing

SAE’s Response . . . Internet

Board of Directors Electronic Product Development & Delivery Task ForceInformation Technology Strategic PlanSAE Personalized WebsiteFour Areas of Focus: TIMS Website e-Commerce CMS

On-line Discussion Forums

SAE’s Response . . . Internet (Cont’d)

Standards and papers - Digitized 85% of Congress Papers received in digitized formatLaunched personalized web pages in December 2000Over 600 standards committees use electronic communications for committee work.Tailor corporate packages of SAE Information

5 Key Trends . . .Technology Advancements

Automotive technologies are expanding and advancing, creating opportunities for SAE.SAE responds to the information explosion

Increased knowledge products Computerized combining of information Rapidly addressing new technologies in Cross-OBC manner

SAE is focused on assuring technical excellence 42 Volt Fuel Cells Intelligent Vehicles Lean Operating Systems Motorsports Aerospace Topic (Get from Scott Klavon)

SAE’s Response . . .Technology Advancements

Service Technicians Society Advanced technical information for

technicians

Performance Review Institute Developing strategic, non-proprietary

intelligence on quality based upon analysis of audit results database

SAE Response . . .Information Knowledge

Board of Directors has directed SAE to: “Further transform SAE from an

Information Providing Society into a Knowledge Providing One.”

Personalized web page

5 Key Trends . . .Globalization

Worldwide mobility communityThink globally and act locallyOpportunity to build international relationshipsFacilitate technology exchangeCreate a global network of mobility professionals

Summary

The mobility community is changingThe role of societies is changingSAE is aggressively responding

Board Blue Ribbon Panel

Met throughout 2000 to develop recommendations for SAE – to assure SAE’s success over the next decadeDeveloped 12 recommendationsThe SAE Board is responding to each

Board Blue Ribbon Panel (Cont’d)

OBCs have a key role in three of the recommendations Create infrastructure and decision-making

processes that encourage reasonable risk-taking, facilitate reduced cycle-time for all new products, and respond to customer needs.

Customize products and services based on membership/customer needs.

Work with SAE staff to utilize SAE and Affiliates to rationalize processes, help companies develop internal standards, and provide high level neutral forums for competitive cooperation.

Board Blue Ribbon Panel Other Recommendations

SAE staff organization should be diverse and function globally.

Assigned to EVP Expanded training Satellite sites (6)

Structure EVP job criteria based on BRP conclusions.

Transition Planning Task Force (Complete)

Hire next EVP based on revised criteria developed by Transition Planning Task Force.

Transition Planning Task Force (Complete)

Board Blue Ribbon Panel Other Recommendations (Cont’d)

Develop business model to include overall society financial stability and value chain of SAE products and services.

Finance Committee Subteam

Seek mergers, joint ventures, cooperative agreements and alliances that enhance value to stakeholders.

SLT continues to address Tier 1 Supplier relationship explored and

enhanced. Missionary commitments

Board Blue Ribbon Panel Other Recommendations (Cont’d)

Take a more active role in the area of harmonization of standards and possible alliances with regional standards organizations.

Technical standards Board addressing Performance Review Institute AECMA and Japan relationship

Board Blue Ribbon Panel Other Recommendations (Cont’d)

Change the ANC process to ensure the election of effective leaders that satisfy all Board and Blue Ribbon Panel criteria.

Agreed to nine additional delegates to ANC Change in ANC voting process ANC modifications Letter from Neil encouraging nominations

from non-U.S. Three Vice Presidents Rotate “automatics”

Board Blue Ribbon PanelOther Recommendations (Cont’d)

Board of Directors’ membership should reflect the broader mobility areas.

Change in voting process Addition of “three” Vice-Presidents Affiliates on nominating committee Rotation of “automatic” seats to six OBCs

EEB, EMB, FBOT, MSB, SB, TSB

Board Blue Ribbon PanelOther Recommendations (Cont’d)

Become the leading source for technical information/knowledge in the mobility industry and provide networking capability for individuals to update their skills to maintain their career mobility. This should include providing professional resources, technical information and knowledge continuity to an evolving career. Career Pathway concept by Career Mobility Subteam Agreed to strategic direction of SAE Brands of the

future.

Principals of Policy Governance

A Board should Define and Delegate, rather than React and Ratify.

Ends determination is the Pivotal Duty of Governance.

Defining Member and Staff Roles

Member Organization

EngineeringMeetings

Board

EngineeringEducation

Board

Foundation Board ofTrustees

Membership Services

Board

Sections Board

ServiceTechnicians

Society

TechnicalStandards

Board

Committees

PRI

Board ofDirectors

Program Offices

Member Role. . .

Determine SAE’s purpose and Objectives (Ends)Determine membership qualificationsEstablish policies (Ends/Means)Approve budget (Finance Committee)Monitor performanceMake technical decisions

Staff Organization

ExecutiveVice President

Executive OfficeSAE Foundation

Human Resource OfficeWashington Office

Executive Director

Performance Review Institute

Executive Director

DesignatedBusiness Units

DesignatedBusiness Units

Board Expectations of StaffVisionary Strategis

tPlanner

Advisor to Board/

Committee

Facilitator of Board/

Committee Meeting

Meeting Organizer

Administrator

Serve and

Support

EVP and Group Directors

Business Unit Managers

Professional Staff (e.g. Engineers)

Support Staff

Early years of SAE Recent Past of SAE Current Expectations

Changing Staff Role . . .

Traditional staff role: take minutes help develop and distribute agendas provide communication mechanisms provide continuity of knowledge base

Changing Staff Role . . .

Changing staff role: member role and staff role complementary asked to provide higher level of participation

in generating ideas for achieving Objectives (Ends)

in developing plans for achieving Objectives (Ends)

Asked to increase capability in the Organizational Development (OD) area

You Can Expect Staff to . . .

Provide guidance in implementing ObjectivesServe as a continuity link and conduit to informationMaintain measuresCoordinate customer feedbackFacilitate committee meetingsBe aware of and stop activities which contradict policyMake suggestions on new strategic issues related to your OBC

SAE Organization

Committed to responding to customer needsConsensus decision makingLarge range of products and servicesVision and direction setting by Board of DirectorsOperating board/committee empowered to implementDedicated to member satisfaction