David O’Dowd                       Tim Trush
Publicis Dialog                    Schneider Electric, North America...
Business “Team” at Schneider Electric
Page 2 of 5

Square D Company with Schneider Electric, Petratis became vice presid...
Business “Team” at Schneider Electric
Page 3 of 5

and we’re focused. This collaboration helps produce faster and better...
Business “Team” at Schneider Electric
Page 4 of 5

       Mentored by a member of the senior staff, each business team m...
Business “Team” at Schneider Electric
Page 5 of 5

       “Large companies – like ours – are rapidly deconstructing and ...
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Igniting the Entrepreneurial Spirit


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Igniting the Entrepreneurial Spirit

  1. 1. Contact: David O’Dowd Tim Trush Publicis Dialog Schneider Electric, North American Operating Division Phone: (312) 552-4620 Phone: (847) 397-2600 Fax: (312) 552-4485 FOR IMMEDIATE RELEASE: Business “Team” Takes On New Meaning at Schneider Electric North American Operating Division Igniting the Entrepreneurial Spirit PALATINE, IL, August 12, 2004 -- While the term “business team” sounds about as cutting edge as “coffee break,” the Schneider Electric North American Operating Division has added a new twist. The team approach is now central to the growth strategy and key to rekindling an entrepreneurial spirit at the company best known for its 101-year-old Square D brand. What’s different is that each of eight cross-functional business teams is embedded within the functional, matrix organization of Schneider Electric, a leader in the electrical distribution, industrial control and automation markets. Each team has seven to nine members, representing all the areas and functions that are important to their business. Team leaders were selected through the Schneider Electric Annual Human Resource Review process (AHRR), designed to identify high achievers and future leaders of the organization, which employs 16,000 people in North America. Momentum for the new business team model comes from Dave Petratis, who was appointed president and CEO in January. He had joined the company a year earlier as COO. It was a homecoming for Petratis, who began work at Square D Company right after college in 1981. In 1993, following the 1991 merger of -- more -- Schneider Electric North American Operating Division 1415 South Roselle Road Palatine, IL 60067-7399 Tel. (1) 847-397-2600 Fax (1) 847-925-7271
  2. 2. Business “Team” at Schneider Electric Page 2 of 5 Square D Company with Schneider Electric, Petratis became vice president of operations and then president at EPE Technologies, a manufacturer of uninterruptible power supplies in Costa Mesa, California, partly owned by Schneider Electric. He was then part of a leveraged buyout resulting in the creation of MGE UPS SYSTEMS. Annual sales at the company grew from $50 million in 1993 to $286 million in 2001. Business Teams Accelerate Pace, Drive Strategy “As you often see in small to mid-sized firms that get on a nice growth track, we had a tremendous drive and sense of accountability at MGE because management was vested in the operation in every way,” said Petratis. “That’s not to say entrepreneurial qualities have been lacking at the North American Division of Schneider Electric, but the very structure of a $2.5 billion operating division of a $10 billion company can sometimes restrict the drive and capacity needed to quickly seize opportunities,” said Petratis. “I want the business teams to change our process and our culture. They’ll drive the means by which we develop and execute business strategy.” The business teams are improving the speed and quality of decision-making, according to Allen Breeze, who leads a team focused on creating new opportunities for the company’s Engineered to Order group, which sells medium and low voltage electrical equipment such as switchgear and motor control centers. His team is focused on expanding opportunities in the energy and infrastructure market, particularly with water and wastewater treatment centers. A 20-year veteran of the company, Breeze said the cross-functional business team approach runs somewhat against the grain of the company’s functional matrix organization. He likes it that way. “Business teams are organized around selected product groups and aligned with established market segmentation and customer strategies,” said Breeze. “We’re still a functional, matrix organization but each team is assessing opportunities through the lens of every major function in our company. It’s like a S.W.A.T. team. We move fast -- more --
  3. 3. Business “Team” at Schneider Electric Page 3 of 5 and we’re focused. This collaboration helps produce faster and better decisions. This cross-fertilization is what we need right now to accelerate growth and seize opportunities in a fast-changing marketplace where opportunities wait for no one.” The transparency that the business teams are bringing to important issues comes largely from a demanding quarterly review process where opportunities are debated and decisions and commitments are made. Participants are encouraged to get everything out in the open. Get It Off Your Chest…And On The Table “I think everyone would agree that this new system forces us to put the tough issues on the table,” said Petratis. “Team members must collaborate among themselves and with other teams because so many of our products cross market segments. The whole process compels people to go to bat for what they believe in. In other words, it results in commitment to doing what must be done, individually and collectively.” Team members are expected to understand their business better than anyone else, run their business like they own them, execute in tightly defined areas and be prepared to report on progress every quarter, explained Rita Danker, vice president, organizational development and human resources. Her department has played a key role in creating the business team structure and in training and developing the teams to take on their expanded responsibilities. Moreover, human resources is represented on each business team along with others from virtually every functional area of the business. “We did a lot of benchmarking with world-class companies in the development of this program, and we didn’t see anything quite like what we’re doing with these teams,” said Danker, a 12-year veteran of the company. “These business teams are creating a new structure for the way we run our company and they are putting a new system in place that is driving results.” -- more --
  4. 4. Business “Team” at Schneider Electric Page 4 of 5 Mentored by a member of the senior staff, each business team manages a portfolio of products. “Some liken the business team approach to doing the trapeze with the security of a net,” said Danker. “It provides very capable, ambitious people with lots of room to run and the responsibility of a P&L, but they’re not out there on their own. They are, however, expected to demonstrate considerable resourcefulness, resilience and the ability to motivate others, all of which is key to entrepreneurism and to being a leader.” Results Only six months old, the business team approach is producing results in non- traditional markets where Schneider Electric can build on long established strengths in electrical distribution and control. The Machine Control and Sensing group, for example, is finding a market for its Nano Programmable Logic Controllers (PLCs) in airport security stations, self-service checkout counters and in residential markets near major cities where security-minded homeowners are installing electric gates. Geoff Walker, team leader, said the highly focused team approach is proving its worth in identifying which opportunities should be pursued – or not. “We were recently presented with an opportunity that looked very promising at first, but we ultimately declined the business,” said Walker, whose group has recently adjusted its growth forecast upward. “We turned to the team and the breadth of insight around the table made us see that the negatives outweighed the positives,” said Walker. “It wasn’t too long ago when we would have taken the business, only to regret doing so.” Indeed, they’re finding that calling on a team of seven to nine colleagues with common interests but different roles is producing fast and efficient collaboration and the accountability more typical of smaller enterprises that can’t afford to waste energy and resources. -- more --
  5. 5. Business “Team” at Schneider Electric Page 5 of 5 “Large companies – like ours – are rapidly deconstructing and reorganizing to address the critical advantage that’s inherent to smaller competitors,” said CEO Petratis. “As economies expand and develop globally, entrepreneurial activity is seen as a cornerstone of the development process, whether it’s new, start-up firms or new ventures within existing firms. “From the time I arrived in this job, I wanted to evolve the way we develop and execute business strategy,” said Petratis. “One of my goals was to create a management process that really forces us to be disciplined and rigorous in terms of planning our business, and setting priorities and identifying issues. To do this, we need to create a new system of management and challenge the functional organization of our business. We need to break down this $2.5 billion business into manageable pieces. The business teams were created to help us do all of this, and the early results are even better than we expected.” ### Schneider Electric North American Operating Division Headquartered in Palatine, Ill., the North American Operating Division of Schneider Electric had sales of $2.5 billion (U.S.) in 2003. The North American Operating Division is one of four operating divisions of Schneider Electric, headquartered in Paris, France, and markets the Square D, Telemecanique and Merlin Gerin brand products to customers in the United States, Canada and Mexico. In the United States, Schneider Electric is best known by its flagship Square D brand, with Telemecanique becoming increasingly known in the industrial control and automation markets and supported by many Square D distributors. For 100 years, Square D has been a market-leading brand of electrical distribution and industrial control products, systems and services. Schneider Electric is a global electrical industry leader with 2003 sales of approximately $9.9 billion (U.S.). Visit Schneider Electric on the Internet at: • Corporate – • Telemecanique Products – • Square D Products – • Merlin Gerin Products –