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» NOVEMBER 2009

Background to the Lonmin Engagement
Lonmin is currently suffering from the negative impact caused by the way the organization manages elements of its structured and unstructured information or content. They have launched a number of new strategic applications and initiatives to control this risk and have engaged Barnstone to manage the organizational change and communication required to assist in the effective delivery of these interventions. These initiatives include SAP enterprise content and document management modules, a SAP Environment Health and Safety module and the amendment of various company-wide policies and procedures around information management. The cost to date of these initiatives to Lonmin is in excess of R60m.

Why Lonmin is changing
In our analyses and assessment of the Lonmin environment, including employee willingness and ability to adopt the above changes effectively, we conducted a simple but very telling diagnostic summarised below:

The above diagnostic painted a picture of an under-controlled information or business knowledge environment but also highlighted a willingness and pull for organisation change from the employees who were polled.*

How Barnstone has helped Lonmin to change
The critical element of the Barnstone approach to Change Management is Leadership. Change is Leadership driven and Leadership provides the golden thread in tying together the elements of People, Practices and Environment that makes up the organisation. In our approach we have prompted the Lonmin executive leaders to own and lead the above change management initiatives in their organisation. Through the process of aligning leadership across the business with the planned initiatives, we have engaged the Lonmin organisation and enabled them to change with a minimum impact on organisational performance. Key employees have also been provided with the necessary capability, skills and tools to effectively lead change from within the business. Barnstone has designed and managed this program of change and communication since June 2008 and will continue to do so till the end of October 2009.

What Barnstone has learned at Lonmin
It is our experience that the real challenge with change management lies not in formulation of strategy but when the implementation going gets tough amongst the human and group organization dynamics. During the Barnstone’s involvement on the project from June 2008 to current day, Lonmin has undergone unprecedented business challenges and difficult internal changes. They have cut 7,000 jobs since the onset of the global financial crisis last year, turnover of senior leadership has historically been and continues to be very high and a potentially hostile takeover by Xstrata remains a very real prospect.

With the above-mentioned challenging circumstances in mind, the following top 5 risks to managing proposed change initiatives effectively were re-assessed in June 2009 and are represented in the following qualitative risk analysis matrix:

The identified risks highlighted were communicated to the Lonmin Project Leadership with the following proposals to mitigate the identified risk:

• Key Stakeholder Resistance
• Re-iterate change imperative, vision and enrolment with top down push from senior leadership
• Lack of Visible and Deliberate Leadership demonstrated in supporting initiative at various levels
• Change Capability transfer with direction from Change SME and issue highlighting at relevant levels from Senior leaders
• Resources allocated to the Guiding Team for change in Mining
• High level Capability assessment with proposal for change implementation with support from Senior Leaders
• Competing Solutions (G-Risk and others)
• Re-enforce the commitment to decommission competing solutions and continue to enrol resisters to change away from G-Risk with push from senior leadership.
• Perceived Gap between IT (Technical project team) and Business
• Greater synergy and information flow between IT and Business to develop relationships that are supported by senior leadership.

The conclusion we would like to draw from the lessons learned at Lonmin is the re-enforcement of the critical element of Leadership in effective change management; working individually and collectively with leaders to focus and align their attention on the change initiative, build and demonstrate commitment through visible felt leadership actions, and inspire people to change through re-iterative and employee supportive management. Our focus has remained on understanding what prevents people who could be good leaders from leading well and enabling them and their organisations to change through engagement.

The Barnstone Team members who have delivered at Lonmin
Deon Crafford, Lizelle Pauw, Koos Pauw, Andre Human, James Viviers, Heila Roos and Iain Campbell