Building The Architecture

May 2, 2012 Shingo Prize Conference Jacksonville, FL

Barry L. Pennypacker President & CEO

Safe Harbor Disclosure

All of the statements made by Gardner Denver in this presentation or made orally in connection with it, other than historical facts, are forward-looking statements. As a general matter, forward-looking statements are those focused upon anticipated events or trends, expectations, and beliefs relating to matters that are not historical in nature. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for these forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that forward-looking statements are subject to known and unknown risks, uncertainties, and other factors relating to the Company s operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company. These known and unknown risks, uncertainties, and other factors could cause actual results to differ materially from those matters expressed in, anticipated by or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: changing economic conditions; pricing of the Company s products and other competitive market pressures; the costs and availability of raw materials; fluctuations in foreign currency rates and energy prices; risks associated with the Company s current and future litigation; and the other risks detailed from time to time in the Company s SEC filings, including but not limited to, its annual report on Form 10-K for the fiscal year ending December 31, 2010, and its quarterly reports on Form 10-Q. These statements reflect the current views and assumptions of management with respect to future events. The Company does not undertake, and hereby disclaims, any duty to update these forwardlooking statements, although its situation and circumstances may change in the future. The inclusion of any statement in this presentation does not constitute admission by the Company or any other person that the events or circumstances described in such statement are material.
SF PowerPoint Template 03-27-08/2

Gardner Denver Overview

~$2.4B(1) global Company with diverse and attractive end markets Leading brands and technologies strong distribution New, operationally focused team driving The Gardner Denver Way Growing, profitable aftermarket opportunity Strong track record on analyzing and integrating acquisitions Focused on superior cash and earnings growth Early stages of transformation to a high quality, high margin Industrial Company with Energy exposure
SF PowerPoint Template 03-27-08/3

A Global Leader in Compressed Air And Gas, Vacuum and Fluid Transfer Technologies
We serve a wide range of industries with efficient & reliable products

Energy

Medical

Mining

Transportation

Food & Beverage

SF PowerPoint Template 03-27-08/4

The Fish Rots From The Head First!

SF PowerPoint Template 03-27-08/5

What Is Architecture?
The structure and behavior of a system that is to be or has been constructed.

SF PowerPoint Template 03-27-08/6

What types of structure or behaviors should be evident in a successful operationally excellent company? I would argue that the ten Shingo Principles of Operational Excellence are a place to start.

SF PowerPoint Template 03-27-08/7

Ten Principles of Operational Excellence

Create value for the customer Focus on process Respect every individual Lead with humility Seek perfection Assure quality at the source Flow and pull value Enhance scientific thinking Think systematically Create a constancy of purpose

SF PowerPoint Template 03-27-08/8

Why Do Most Transformations Fail?

Failure of leadership Not a sufficient amount of urgency Tools are substituted for vision Undercommunicating, period! Not understanding the human resource implications Pound your chest too soon Not making changes permanent
SF PowerPoint Template 03-27-08/9

So What Can We Do?

Recognize the psychology behind change.

Denial

Commitment

Resistance

Exploration
SF PowerPoint Template 03-27-08/10

How Do We Sustain Positive Change?

Remove bureaucracy Blameless environment Empower Open and candid about the change Take risks Exhibit a sense of urgency Recognize that change is not the issue, resistance is!
SF PowerPoint Template 03-27-08/11

Another Hint!
Learn First P D C A Create Great Teachers Create Great Students

SF PowerPoint Template 03-27-08/12

Is Operational Excellence A Strategy?

Organic growth
CUSTOMERS

Aftermarket growth

Margin expansion
SHAREHOLDERS

Innovation High Velocity

RESOURCES
EMPLOYEES

Innovative products

Selective acquisitions

OE is an enabler, but not a stand alone strategy!

SF PowerPoint Template 03-27-08/13

A Thought
If you tell me, I will listen. If you show me, I will see. If you let me experience, I will learn.
Lau Tzu (6th Century BC)

SF PowerPoint Template 03-27-08/14

Remember!

SF PowerPoint Template 03-27-08/15

Lessons Learned
Employees need a vision or some type of image that provides clarity to the future.
CUSTOMERS

Velocity Innovation
SHAREHOLDERS EMPLOYEES
SF PowerPoint Template 03-27-08/16

RESOURCES

Lessons Learned
Don t ever let yourself believe that you have delivered the message and everyone gets it. This is not a desk job. It is a contact sport! A failure to plan is a plan to fail. Be a prudent risk taker. Lack of financial success is usually an organizational issue. Be flexible. It doesn t always work. People by nature are good, processes by nature are bad.
SF PowerPoint Template 03-27-08/17

Remember the 4 P s
PASSION PERSISTENT PATIENT PEPTO BISMOL

SF PowerPoint Template 03-27-08/18

Thank You For Your Attention!

Questions?

SF PowerPoint Template 03-27-08/19