Corporate culture.

Together with its employees, Telekom has initiated an extensive transformation of our corporate culture with the aim of creating more agile and more efficient work processes and encouraging our employees to take a more innovative and entrepreneurial approach. We are working to encourage our employees to take responsibility, expand international collaboration and strengthen our corporate culture, which is based on trust, throughout the Group. Our Guiding Principles and our Code of Conduct are the foundation of our shared, global corporate culture.

Our Guiding Principles—the foundation of our corporate culture worldwide.

Having a clear orientation based on accepted values is an integral element of our corporate culture. At Deutsche Telekom integrity, mutual respect, reliability, consistent customer orientation and performance orientation are among the principles that guide the conduct of our employees. These values are defined in our Guiding Principles, which are binding for all 56 Group companies—with the exception of OTE in Greece—that represent the consolidated units comprising Deutsche Telekom. OTE will be completing the implementation of the Guiding Principles during 2013.

The Guiding Principles are firmly rooted in our corporate and HR processes, such as the employee competency models and the performance review procedures in all of our subsidiaries. This enables us to create a viable basis for our corporate culture that is consistent throughout the Group. Through events and specific campaigns, we raise our employees' awareness of our basic values and encourage them to act in accordance with our accepted principles. The highlight in 2012 was Guiding Principles Day, which was observed throughout the Group for the third time.

Our employees confirm that our commitment to the values represented by our corporate culture is paying off: 63 percent of those participating in the Group's 2012 employee survey said that acting in accordance with the Guiding Principles is becoming an accepted practice every day, and they view these principles as the solid basis for effective collaboration.

Guiding Principles Day. Anchoring corporate culture in daily working life.
In order to make practicing the Guiding Principles a matter of course, a Guiding Principles Day is held every year at all Group units. All of our employees are called upon to think about the Guiding Principles and come up with ideas on how to implement them in day-to-day work. The third Guiding Principles Day took place on September 26, 2012, with a great turnout. This event took place in 34 countries and 50 business units, with inspiring and novel activities conducted in 19 different languages to underscore the importance of our Guiding Principles. Activities included team events, discussion panels and surprise flash-mob dance performances.

The day's success continued even after the event was over. Around 500 pictures, videos and comments on Guiding Principles Day were handed in to be published in the intranet, and the intranet special, which we launched in June 2012, had been clicked more than 100,000 times by the end of the year. The next Guiding Principles Day is scheduled for September 25, 2013.

Code of Conduct: promoting compliance every day.

Ways of living up to the values of our Guiding Principles every work day are defined in our Code of Conduct, which applies throughout the Group. The code supplements the values stated in the Guiding Principles by outlining clear, legally compliant approaches to daily conduct that must be followed by our employees. Thus the Code of Conduct serves as a bridge between corporate culture and compliance awareness, offering us support in maintaining daily business conduct that is both ethical and legally compliant in every way.

The Code of Conduct was completely revised in 2010 and 2011, and was implemented in all of the fully consolidated companies within the Group. We monitored the implementation process in all units until the end of 2012 via the pulse check. When the implementation process was completed, some 72 percent of those surveyed said that the Code of Conduct represented an important source of orientation that influenced their professional behavior.

There has also been an increase in the number of employees who believe that they can report improper conduct without suffering negative repercussions. The proportion of employees throughout the Group sharing this view increased from 67 percent in 2010 to 75 percent in 2012, according to the results of the employee survey.

Campaigns, training sessions and guidelines spelling out the specifics contained in the various sections of the Code of Conduct were at the core of our activities in 2012. Typical examples included the anticorruption campaign and many on-site compliance training courses that were held throughout the Group. We also support employees by providing them with the latest guidelines pertaining to topics such as consulting and sponsoring.

Standardized tools and international network support cultural transformation.

Telekom wants and needs to provide its customers with excellent service at competitive prices, both on our domestic market in Germany as well as at our European subsidiaries and affiliates. That is why we are continuing to restructure our company. Our goal is to structure the company in a way that will make it as efficient as possible while providing maximum flexibility for our customers. That means our employees need to be ready to embrace the change. We introduced a change management system throughout the Group in 2009 to help our employees adjust to challenging changes during our transformation to the "new Telekom" and to firmly establish the new structures and the new corporate culture as part of their daily work. Our globally available Change Navigator, a kit of tools and information on the topics of change and change management, is intended to help create a uniform understanding of the transformation that is taking place throughout the Group. As a Group-wide best practice platform, the Change Navigator helps design appropriate measures for managing change projects and processes. We continue to advance the Change Navigator with the help of experience and feedback. However, this tool cannot replace the professional assistance of change experts. That is why Telekom offers certified on-site training programs where the HR Business Partners  and managers at the business units can become change managers. We also make sure our change experts are networking effectively and communicating regularly through channels such as social media platforms and teleconferences.

Promoting agility, knowledge transfer and innovativeness—a new unit is leading the way.

We are consistently redefining the role of Human Resources. In January 2013 we began bundling activities related to cultural transformation at Deutsche Telekom and established the Group Transformational Change unit to manage these activities. This unit develops sustainable solutions and offerings for the world of the future—both professional and private. These solutions include new forms of internal and external collaboration, agile work models, improved innovation and service orientation, as well as measures for promoting entrepreneurial thinking and action. A series of pilot projects were launched in 2012. We then boosted these activities in 2013. Instead of utilizing standardized training and seminar programs, Group Transformational Change applies creative approaches that address specific needs as they arise. The concept is renewing our corporate culture – not by merely following directives issued by headquarters, but rather through concrete measures and initiatives originating in the various Telekom business units.

Continuing to expand our service orientation.

Delivering the best possible service to our customers—anytime, anywhere—is a fundamental tenet at Deutsche Telekom, and it is one of our most important competitive value propositions in today's market. We have launched numerous initiatives and programs to raise service awareness in all Telekom companies and segments. These activities will ensure that we are—and remain—the customer's first choice. One example of these efforts is the Voluntary Christmas Helpers program at Magyar Telekom, in which more than 200 additional employees voluntarily help their colleagues in the shops during the holiday season. And Slovak Telekom presents the Service Hero Award to those employees who demonstrate outstanding service consciousness. We have initiatives and programs in nearly every Group company so that we can maintain and improve the high quality of our service.

In Germany we have also relied on our Service Academy since 2008. In fact, all managers are required to participate in this program. The goal of the Service Academy is to maximize service consciousness, customer understanding and service competencies, especially for managers who do not have direct customer contact. To reach this goal, managers participating in the Service Academy are given an opportunity to learn about what customers expect from us in daily real-life situations. In addition to providing theoretical knowledge, the program also helps participants gain hands-on experience by having them visit various service units and shops, where they carry out tasks involving direct contact with customers. Over the past five years, 98 percent of our managers in Germany have participated in the Service Academy annually. In 2012 the number of those taking part in the program was about 1,800.

We are currently working on plans to further develop the Service Academy, which is a German initiative, so that we can transform it into an international program. In the future the target group will not be limited to upper-level management in Germany, but will also include international participants across all hierarchies. Future program content will be comprised of theoretical and practical modules that will be developed in collaboration with our stakeholders.