Polaris 2007 Annual Report Download - page 12

EIGHT POLARIS INDUSTRIES INC.
A LETTER FROM THE CHAIRMAN
Dear Shareholders,
Two of the Board’s most important priorities are shaping Polaris’ growth strategy,
and leadership development and succession planning. We have spent a considerable
amount of time over the years thinking about each of these. In fact, this past
summer, management and the Board conducted a strategic session covering the
next 10 years, looking at the industry, worldwide trends and economic factors.
After much deliberation, discussion and analysis, we came away feeling that the
current strategic direction for our existing businesses is on target: winning in our
core businesses (ATVs and snowmobiles) and growing in our current growth
businesses (Victory, RANGER, international and military).
However, we feel we must also look beyond our current product and customer sets
to remain a successful company in the future. We believe the key to Polaris’ longer-
term success will be to expand globally, expand the on-road business, and continue
to expand our presence in businesses outside of powersports, such as the military.
If we are successful in accomplishing these strategic objectives, we will be a much bigger and more profitable
company, perhaps approaching $5 billion in sales in 10 years.
The Board is confident Polaris can successfully adapt to these longer-term objectives because our management team
is deep and our product development pipeline is strong. The $35 million we invested in the Wyoming R&D center a few
years ago — the largest single facility investment the company has ever made — has proved itself with new products like the
RANGER RZR and Victory Vision, two of the most successful products the company has ever made. So the momentum
is building, the opportunities are there, and we believe we can make Polaris even more successful in the future.
That leads me to another Board priority, leadership development and succession planning. As many of you have heard
by now, CEO Tom Tiller has decided not to extend his contract after 2008. First and foremost, I want to make it clear
the Board of Directors is extremely pleased with Polaris’ superb performance in a tough external environment and its
overall strategic direction. Tom’s decision to leave Polaris is personal and based on his belief that innovative companies
like Polaris need an infusion of fresh ideas every decade or so. It’s not any more complicated than that.
While we are sad to see Tom leave, the Board felt comfortable with his decision because we have a sound succession-
planning process in place. We worked for several years to develop a comprehensive plan that ensures we do a thorough
search — both internally and externally — for the right person to lead Polaris in its next phase.
Polaris President and COO Bennett Morgan is a strong internal candidate, but we won’t know if he is the best candidate
until we have evaluated all the best external candidates. Once we do choose a successor, Tom will remain on the Board
for a transitional period to ensure a smooth transition.
I would also like to acknowledge some changes in our Board that occurred in 2007. Rick Zona decided to step down,
and we thank him for his many years of service and oversight on the Board. We also welcomed a new Board member
in 2007, John Wiehoff, CEO of C.H. Robinson, a global provider of multimodal transportation services and logistics
solutions. John’s skills complement the many and varied talents we have on the Board, and his contribution will be
valuable as Polaris pursues a more global future.
So, in the short term, it’s business as usual at Polaris — working toward the 2009 goals outlined in Tom and Bennett’s
letter, while at the same time positioning the company for success longer term. Our 10-year plan is achievable, with
sensible investments and good execution. As a Board, we are very excited about the future of Polaris.
Gregory R. Palen – Chairman