jo westh, confiance

Developing, engaging and motivating your people

Getting your culture right:

Exploding the myth of the

high performance culture


The Australian industry environment presents both

challenges and opportunities …

The thermal coal industry has suffered serious deterioration of cash cost performance over the last 7 years

The capital cost of thermal coal projects is now 60% less competitive than the rest of the world

The mining industry has given up all the productivity gains of the ‘80’s & 90’s in the last 10 years

The majors (Xstrata; BHP; Rio) are all throttling back their coal programs


Australia’s thermal coal industry has faced escalating

operating costs since the mid 2000’s …

Position on cost curve (quartile)

% tonnes production

In 2006 more than 60% of our

thermal coal mines cash costs

were 2nd quartile or better …

today less than 30% of our

mines are Q2 or better


Since 2000 the Australian mining industry has given up all

of the productivity gains of the previous 15 years …

Multifactor Productivity (index=100 in ‘09-’10)


How to respond…

Clearly articulated strategy

Hire talented leaders who align with the strategy

Build a high performance organisational culture to create a new industry benchmark

Pursue innovative solutions … unshackled from past practices

Underpinned by sound management practices and strategic risk controls


High Performance Culture

• A high performance culture is evident in a

company with a unique personality and soul,

and with a passion for performance - so that

people make the right decisions and do the right

thing no matter what position they hold in the

business.

• The value of a well-planned and well-executed

high performance culture can be

transformational.


Importance of Alignment

Strategy

The key driver is and must be strategy, the fundamental focus of your organisation taken to gain and sustain a significant competitive advantage in the marketplace.

Culture

The way that an organisation conducts its activities in order to succeed.

Leadership

Creating a vision and direction for the organisation and mobilising people to accomplish them.

Effectiveness will be enhanced when these are in alignment, when all the elements of a company work together in concert within the context of the company’s core ideology and the type of progress it aims to achieve.

Alignment

Strategy

Culture

Leadership


Introducing “Longwall Leaders”

The Vision

“To be the largest underground thermal coal miner

in Australia, safely producing 20 million tonnes per

annum, using sophisticated longwall technology

and a very lean highly productive workforce.”

Lon

gwall Le

ade

rs


Insights into strategy

Where does the businesses strategy lie in terms of this framework?

Development and enrichment Product Superiority

EXPERTISE

• Strategy is to be the best (not necessarily the biggest) •Offer the best product • Continual innovation, year after year

Uniformity and Excellence

UNIFORMITY

• Strategy is to achieve market dominance • Low price and high volumes • Quality of product is not the issue, it’s all about market share

•Strategy is to achieve synergy with the customer • Deliver what the specific customer wants, not what the market wants

•We have the best and tailored solutions for you

RELATIONSHIP

Client Relationship

ENRICHMENT

• Strategy is to help customer realise their potential

•Raise the human spirit (e.g., many non for profit, charities )…


Insights into culture

Types of business culture

RELATIONSHIP

Synergistic

Customer relationship High customisation

UNIFORMITY

Market share dominance Structured/procedure driven

Distribution intensive Safety/life or death

EXPERTISE

Create market niche Constant innovation to stay ahead

Superiority Excellence

ENRICHMENT

Growth of customer Realisation of ideals

Values Higher order purposes

Change the world as we know it


Insights into leadership

Team Leader Chief

UNIFORMITY

Firm

Assertive Commanding Authoritative

Directive

RELATIONSHIP

Coach Participative Builds trust

Perfectionist

EXPERTISE

Assertive Convincing

Standard setter Task master…

Change Agent

ENRICHMENT

Catalyst Builds commitment

Steward

How is leadership exercised within the business and how should it be?


Insights into leadership

Team Leader Chief

UNIFORMITY

Firm

Assertive Commanding Authoritative

Directive

RELATIONSHIP

Coach Participative Builds trust

Perfectionist

EXPERTISE

Assertive Convincing

Standard setter Task master

Change Agent

ENRICHMENT

Catalyst Builds commitment

Steward

How is leadership exercised within the business and how should it be?


Back to high performance!?!

A high performance culture fits with which

one of these models?

Beware the one size fits all approach or

the “flavour of the month” initiatives


Tailored interventions

• So once you understand your strategy, define

your culture and align your leadership, building

interventions to support your organisation’s

uniqueness falls into place!


Organisational structure

ENRICHMENT Unstructured, circular

Hierarchy

UNIFORMITY

RELATIONSHIP

Semi autonomous work groups

Type name here

Type title here

Type name here

Type title here

Type name here

Type title here

Type name here

Type title here

EXPERTISE Matrix, project based


Why do high performance organisations fail to

deliver high performance?

1. The initiative or intervention is not tailored to

suit the uniqueness of the organization with the

need.

2. Business leaders grab the label of “High

Performance Culture and then ignore the many

other initiatives needed to support the label.


Longwall Leaders


Insights into strategy

Where does Longwall Leaders lie in terms of this framework?

Development and enrichment Product Superiority

EXPERTISE

• Strategy is to be the best (not necessarily the biggest) •Offer the best product • Continual innovation, year after year (e.g. Microsoft)


UNIFORMITY


•Strategy is to achieve synergy with the customer • Deliver what the specific customer wants, not what the market wants

•We have the best and tailored solutions for you (e.g. Professional Services firms)

RELATIONSHIP

Client Relationship

ENRICHMENT

• Strategy is to help customer realise their potential

•Raise the human spirit (e.g., many non for profit, charities )


UNIFORMITY



But……….

• New project costing billions, no revenue

• Can’t pay top $

• Lack of leadership talent


Bureaucracy going mad!


Communication becomes unwieldy


Training disappears


Then the industry nose dive!

• Co leaders get nervous

• Cost cutting occurs

• Redundancies, loss of privileges

• Office closures

• Cut suppliers and contractors

• Morale plummets

• Third party intervention increases as management lose trust

• Productivity declines

• Turnover of staff increases

So much for our high performance organisation!


Beware your reputation outside your company!

• Suppliers and contractors become wary

• LL hammers them to cut prices and then take

ages to pay bills

• Treating suppliers as second class citizens

translates to a degraded service and a list of

companies who refuse to to provide the required

services

So much for our high performance organisation!


Summary of the LL plight

• Started off fine but…..

• It was only words, actions didn’t support the

words

• They didn’t live it

• They didn’t measure success

• And they didn’t reward any behaviour that

supported the high performance principles


Twelve steps to maximise the alignment of strategy, culture

and leadership and build high performance

• Articulate the strategy

• Make sure the culture matches the strategy

• Make sure the leaders’ style is in line with the strategy

• Design an organization structure that supports the business strategy – in the case

of LL a flat but hierarchical structure with clear chain of command – “rightsize” in

good and bad times

• Identify simple performance indicators that will secure the desired level of high

performance and cascade down the organisation

• Recruit well – secure the best people and offer an appropriate reward scheme

• Include significant at risk rewards payable on the achievement of the high

performance targets

• Communicate constantly– regular, structured communications to inform and

motivate – good, bad, even no news

• Measure everything – Productivity, Morale, Job satisfaction, Performance,

Turnover

• Provide training and opportunities for development

• Have the guts in bad times to invest in your people

• Develop positive and respectful partnerships with suppliers

• KEEP IT SIMPLE


Tips!

• Don’t just grab the label of “High Performance

Culture and then ignore the many other

initiatives needed to support the label

• Tailor the initiative or intervention to suit the

uniqueness of your organisation...


CO

NFIA

NC

E

Confiance


jo westh, confiance

Documents

coal programs

thermal coal mines cash

australian mining industry

excellenceuniformity

businesses strategy

worldthe mining industry

mobilising people

market wantswe