Brief presentation on organisational effectiveness delivered at the AUSTMINE conference in Perth 2013

1. Developing And Enhancing Organisational
Effectiveness At Gold Fields
AUSTMINE 2013
Dr. Shane Hodgson
Perth, May 22nd 2013

2. Forward looking statements
Certain statements in this document constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and
Section 21E of the US Securities Exchange Act of 1934.
In particular, the forward looking statements in this document include among others those relating to the Damang Exploration Target Statement; the Far
Southeast Exploration Target Statement; commodity prices; demand for gold and other metals and minerals; interest rate expectations; exploration and
production costs; levels of expected production; Gold Fields’ growth pipeline; levels and expected benefits of current and planned capital expenditures;
future reserve, resource and other mineralisation levels; and the extent of cost efficiencies and savings to be achieved. Such forward looking statements
involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the
company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such
risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa, Ghana, Australia, Peru
and elsewhere; the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions, exploration and
development activities; decreases in the market price of gold and/or copper; hazards associated with underground and surface gold mining; labour
disruptions; availability terms and deployment of capital or credit; changes in government regulations, particularly taxation and environmental
regulations; and new legislation affecting mining and mineral rights; changes in exchange rates; currency devaluations; the availability and cost of raw
and finished materials; the cost of energy and water; inflation and other macro-economic factors, industrial action, temporary stoppages of mines for
safety and unplanned maintenance reasons; and the impact of the AIDS and other occupational health risks experienced by Gold Fields’ employees.
These forward looking statements speak only as of the date of this document. Gold Fields undertakes no obligation to update publicly or release any
revisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of
unanticipated events.
Gold Fields Limited | Presentation Name | Date
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3. Risks of Re-engineering for Cost Reduction
In the current challenging business environment, knee-jerk reactions to the diving gold price
can do more harm than good. Ad-hoc spending cuts can damage reputation and
infrastructure and demoralize employees. For cost conservation and reduction measures to
stick, companies must clarify the cost drivers of the business and use that knowledge to
create a culture of cost consciousness, in both bad times and good.
Rather Focus on Organisational Effectiveness
Effectiveness: the extent to which the organization achieves its goals or goal.
Efficiency: Takes into account the amount of resources used to produce the desired output.
Thus: Organizational effectiveness is the concept of how effective an organization is in
achieving the outcomes the organization intends to produce

4. Choosing Our OE Orientation
 Constituency Approach: Effectiveness is the ability to satisfy multiple strategic
constituencies both within and outside the organization.
 Domain Approach: Effectiveness is the ability to excel in one or more among several
domains as selected by senior managers.
 Goal Approach: Effectiveness is the ability to excel at one or more output goals.
 Internal Process Approach: Effectiveness is the ability to excel at internal efficiency,
coordination, motivation, and employee satisfaction.
 System Resource Approach: Effectiveness is the ability to acquire scarce and valued
resources from the environment.
Given the reality that mining needs to satisfy multiple groupings of stakeholders in order to
achieve a social license to operate as well as a regulatory license to operate – and needs to
attract talent across different generations, the “Constituency Approach” is deemed the
most appropriate one for Gold Fields.
Cameron, K (1980) from
http://webuser.bus.umich.edu/cameronk/PDFs/Organizational%20Effectiveness/Critical%20Questions.pdf
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5. Using the Lewis Carroll Approach to Defining OE…
"When I use a word,' Humpty Dumpty said in rather a scornful tone, 'it means just
what I choose it to mean — neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master— that's all.“
“Through the Looking Glass and What Alice Found There” by Lewis Carroll (1871), from
http://en.wikiquote.org/wiki/Through_the_Looking-Glass
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6. Adopting a Model for OE in Gold Fields
 As a foundation, we use the Burke-Litwin model
as a framework for assessing the factors we
believe are important in organisational
performance when seen from an HR or OD
viewpoint. This imparts a distinctly “OD” flavour
to the analysis and subsequent interventions,
and distinguishes us from the more processoriented approach of our Business Improvement
department.
 Work done by Martins and Coetzee (2009)
indicates that the Burke-Litwin model provides a
“… convenient and valid shorthand method of
identifying and explaining multiple key
organisational phenomena that affect the
organisation’s performance and overall
effectiveness”
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7. Transactional and Transformational Dynamics
 The Burke–Litwin model highlights two distinct sets of organisational dynamics. One set is
primarily associated with the transactional level of human behaviour, or the everyday
interactions and exchanges that create the climate of the organisation. The second set of
dynamics is concerned with processes of human transformation, amounting to sudden
‘leaps’ in behaviour.
 According to Burke and Litwin, the external environment affects transformational factors,
which are identified as the organisational mission and strategy, leadership and culture.
The transformational factors, in turn, affect the transactional factors, which are identified
as the organisational structure, systems, management practices and climate. Both types
of factors reciprocate, and eventually impact on, individual and organisational
performance and overall effectiveness
“Applying The Burke–Litwin Model As A Diagnostic Framework For Assessing Organisational Effectiveness” Martins and Coetzee, (SA Journal of Human Resource
Management; Vol 7, No 1, 2009)
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8. Transformational factors affecting OE
External environment: Any outside condition or situation that influences the performance
of the organisation.
Vision, mission and strategy: What employees believe to be the central purpose of the
organisation and how the organisation intends to achieve its purpose over an extended
period of time.
Leadership: Behaviour that encourages others to take necessary actions, including
perceptions of leadership style, practices and values.
Organisational culture: 'The way we do things around here.‘ Culture is the collection of
overt and covert rules, values and principles that guide organisational behaviour.
Individual and organisational performance: The measurable outcomes or results, with
their relevant indicators of effort and achievement. Such indicators might include
productivity, customer or staff satisfaction, profit and service quality, salary and benefits,
and recognition.
“Applying The Burke–Litwin Model As A Diagnostic Framework For Assessing Organisational Effectiveness” Martins and Coetzee, (SA Journal of Human Resource
Management; Vol 7, No 1, 2009)
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9. Transactional Factors Affecting OE
Structure: The deployment of functions and employees so as to implement strategy,
including levels of responsibility, decision-making authority and relationships.
Management practices: What managers do in the normal course of events in using the
human and material resources at their disposal to carry out the organisation’s strategy
Systems, policies and procedures: Standardised policies and mechanisms, such as
rewards, controls, budgets or SOP’s that facilitate work
Departmental/work unit climate: The collective current impressions, expectations and
feelings of the employees in their respective areas
Task requirements and individual skills/abilities: The behaviour, specific skills and
knowledge required for task effectiveness.
Individual needs and values: The specific psychological factors that lead to individual
actions or thoughts relating to stress, well-being, recreation and living conditions.
Motivation: The tendency to move toward goals, take needed action and persist until
satisfaction is attained.
“Applying The Burke–Litwin Model As A Diagnostic Framework For Assessing Organisational Effectiveness” Martins and Coetzee, (SA Journal of Human Resource
Management; Vol 7, No 1, 2009)
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10. Scope - Gold Fields OE Centre of Expertise
Organisational Design
Organisational Structures
Communication and Knowledge
Sharing
Organisational Development
Organisational
Effectiveness
Culture and Engagement
Change Management
People Scorecard and Resource
Utilisation
Organisational Performance
HR Sustainability
ALIGNMENT TO ORGANISATIONAL VALUES
Fit for Purpose Structures
Roles and Grades
Group Org. Design Methodology
Collaboration and Virtual Teaming
Coaching and Mentoring
Internal Communication
BeQ
Culture Transformation
Organisational Climate
Employer Branding and EVP
Group CM Methodology
Change Network Formation
Agility and Resilience
Change Capacity
HRIS usage
People Scorecard
Attraction and Retention
DJSI
Best Employers
Community Engagement

11. Key Organisational Metrics in OE
 Key metrics used in OE are currently aimed at assessing the climate within which
successful change can be initiated, and successful interventions can take place. This
does not supersede the standard metrics of a project such as benefits or value realised,
but rather tracks the alignment of leadership around key goals and measures; the fit-forpurpose nature of organisational structures, roles and competencies and the use and
accuracy of balanced scorecard performance measurement.
 Some major Transformational metrics are thus Employee Engagement, Net Employee
Advocacy; Net Nurture of Talent; Organisational Change Readiness and more.
 It is important to note that our definition of the discipline of OE perhaps includes far more
of the domain of classical Organisational Development than is fashionable. It is not only
about an initiative-based focus on operational metrics, but also at a corporate level it is
about building a clear line of sight all the way from the individual at the stope face to the
organisational strategy.
 We see that line of sight as an alignment between an individual’s KPIs, motivation and
opportunities with those of other individuals, forming groups with aligned competencies
and norms and giving rise to organisational capabilities and culture – all supporting our
strategy.
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12. Major OE Themes for Gold Fields
 We know that providing strategic clarity to all our employees will fulfil a very
fundamental and important need for them. We all want to know what we’re supposed to
be doing; how it contributes to the overall success of the company and where we as an
organisation are heading. That same clarity is also important for our shareholders and for
the communities in which we operate. Combining this with a strong focus on our
organisation’s values means we can be depended on to do what we say we will do, and
we know exactly why we’re doing it.
 Another critically important theme is sustainability – and in this context we can talk about
how sustainable our HR practices are. Work by John Boudreau shows that increasingly
HR practitioners need to ensure that we can achieve success today without
compromising the future – and in South Africa I think we need a fairly fundamental
reinvention of the way we think about HR
 Our newly reduced size will oblige us to work far more collaboratively across functions
that has previously been the case. We will also need to adopt a much more robust
approach to the creation, capture, sharing and management of knowledge. Knowledge
Management practices have been found to mediate the effects of structure, strategy and
culture on OE.
“Linking organizational culture, structure, strategy, and organizational effectiveness: Mediating role of knowledge
management” Wei, Baiyin and Maclean Journal of Business Research Volume 63, Issue 7, July 2010, Pages 763–771
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13. Taking an Enterprise View of Change
We believe that it is critically important to build change management competency within the
company; not only in transactional change management but in transformational change
management. This requires the establishment of change management as a strategic
discipline, and the adoption of a single point of view (and point of triage) for all business
change initiatives requiring organisational change management. This is supported by the
work of Dean Anderson and Linda Ackerman Anderson on Organisational Transformation.
They say:
“We have identified five key strategies so far to creating change as a strategic discipline:
 (1) identifying and managing an enterprise change agenda;
 (2) having one common change process methodology;
 (3) establishing a change infrastructures;
 (4) building a strategic change center of excellence for all change practitioners; and
 (5) creating a strategic change office” (Anderson and Anderson)
Anderson and Anderson, from http://changeleadersnetwork.com/transformational-change-authors
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14. Conducting Organisation Structure Reviews
 Another component of organisational effectiveness is a regular review of the
organisational structures, seeing if they are fit-for-purpose. In a multi-country, largely
decentralised operation such as ours, the degree of fit between organisational structures
and the business and strategic drivers of structure needs to be tested every year or two.
Key components of this are:
 Ensuring that the company structure happens by design and not by accident
 Ensuring the structures are fit for purpose – e.g. the structure for a feasibility study is different for a
full scale project
 Striking the right balance between Standardisation and Customisation
 Getting accurate data from your regions/ operations on structures (Nell, A. 2013)
 Given that organisational structures are a framework through which strategy can be
articulated; processes expressed; resources allocated and people deployed, we need to
strike a fine balance between flexibility and rigidity; between standardisation and
localisation and between the “… two rival organisational structures
of cooperation and competition that coexist in any organisation in different intensities and
mixtures. Finding a desirable mix of the above two structures is currently a challenging
task and no explicit method exists for determining such an ideal mix”
A conceptual model for managing incompatible impacts of organisational structures on awareness levels
Shahla Ghobadi and Farhad Daneshga, Knowledge Management Research & Practice (2010) 8, 256–264
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15. Principles of Effective Organisation Design
 There is no one perfect right answer – but there is a “best fit” design at a moment in time
 The true relationship between Structure and Strategy is not that Structure follows
Strategy, but that there is a dialectic between them. The structure is a way to articulate
the strategy through resource deployment, but it is also an information filter that limits
what we can see and thus constrains our strategy.
 Given our strengths and weaknesses, the design should not be rigid, but should allow for
flexibility and compromises in structure, thus probably ending up as a hybrid model
(Geographic plus augmented Centre, or similar)
 We need to be able to manage the trade-offs in the model by using the levers of
processes, people, leadership and culture.
 We need to spend as much or more time on integration as on differentiation. That means
equal importance for linking groups and functions as for the initial grouping.
 Matrix organisations are notoriously difficult to manage – rather choose a good Grouping
and then support that with linkages.
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16. In Summary…
The discipline of Organisational Effectiveness is a relatively new one both within Gold Fields
and in South Africa as a whole. The imminent formation of a virtual community of practice
(CoP) in this discipline will bring together practitioners from different industrial sectors, using
a local Enterprise 2.0 collaboration suite called Firestring http://www.firestring.com/
We look forward to refining the definition of OE and integrating it more deeply with the
disciplines of Sustainability and Human Capital Management. To that end your comments
and suggestions are welcome and can be addressed to me on
shane.hodgson@goldfields.co.za
Thank You.
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