In a benchmark study in 2002, the University of Johannesburg researched key elements that JSE listed companies identified as challenges in years to come. One of these elements was the need for high performance organisational design.
The UJ study illustrated that organisations in general deal with these challenges, including mining companies.
However, organisational design is often misunderstood as organisational structure. Organisation structure is merely the output of a detailed organisational design process.
Every organisation harbours some inefficient structures, implying than an inadequate process was followed to arrive at a structural design.
These 'dead wood' structures have an enormous impact on overall performance of organisations in terms of human and organisational effectiveness.
Inevitably it also impacts the bottom line. Often organisational problems are caused by ineffective organisational structure.
It is vital to understand what organisational design entails, and how it should be applied in mining operational structure, to enable strategic execution.
Organisational design includes an analysis process to understand current organisational realities. Often, new architecture and structures are required when companies go through mergers, or when the organisation enters a new organisational life cycle phase, or changes in strategy or direction are required, or stakeholder expectations change.
There may also be over extension in service delivery, increases in complexity regarding products and technology, or capital projects.
Capital project technical design and mining methodologies are usually costed well. Unfortunately, structures are often designed purely on technical and equipment manning requirements, by a technical approach.
In the initial phases of a multi million rand capital project, the project team should spend more time on designing an effective organisation for various phases of the capital project.
Structures are usually not maintained properly and often inefficiencies start to creep into organisational performance. One-on-one relationships between people are common, and managers often do not even realise how a structural dichotomy impacts their performance.
Designing high performing organisations should include the definition of the organisation, and staffing principles. This includes reviewing and aligning business processes.
People should be organised around core processes. As a result of the processes, key tasks, certain functions and skill requirements should be identified. Actual facility, layout and equipment requirements for various teams should be defined for each department.
The design should include definitions of support resources and how these functions would interact in reality. Management structure is a key issue to be evaluated and reviewed.
In some mining organisations, management structure is too heavy and centralised at head office, while the design requires managerial skills at operational level, on site.
Coordination and development systems should be analysed and developed in line with operational requirements.
Capital projects are more complex due to organisations being established 'from scratch. Project challenge lie in anticipated causes and effects of a range of variables that will impact the organisation as it progresses through various capital project phases. The challenge includes the establishment of required processes and systems to maintain operational efficiency. Cost implications of an ineffective organisation in initial phases have enormous implications for the return on investment estimates of the project.
High performance organisational design is a critical element to new operations, and specific to ensuring successful project execution, ever more critical as project design and associated structures change faster and faster as project phases change.
From concept through to steady state, organisational design should address deployment, demobilisation, skills retention, and resource utilisation.