Framework proposal for the Supplier Development partnership Eskom Turnaround Programme February 2016 Delivering sustainable, verifiable and significant value

Supplier Development Framework Human Capital Resource representation Resource exposure Skills & talent development Company Development Input and contribution Programme Management & Involvement Information sharing Governance Communication Partnership principles

Supplier Development Framework Human Capital Resource representation Resource exposure Skills & talent development Company Development Input and contribution Programme Management & Involvement Information sharing Governance Partnership principles Communication

Human Capital Resource representation TMC and McKinsey have similar development paths for their human capital Directors Principles Partners Engagement Managers Associates Analysts Directors Partners Engagement Managers Associates Analysts McKinsey development path Trillian Management Consulting development path

McKinsey resources are estimated *McKinsey resources are estimated. TMC resources based on requirements submitted Human Capital CURRENT Resource representation @ Eskom Turnaround Programme* PMO Generation Primary Energy Procurement Claims McKinsey resource spread TMC resource spread Significant imbalance in resource distribution McK Principle McK Partner McK EM McK Associate McK Expert TMC Principle TMC Partner TMC EM TMC Associate TMC Expert

McKinsey resource spread *McKinsey resources are estimated. TMC resources based on requirements submitted Human Capital CURRENT Resource representation @ Eskom Turnaround Programme* McKinsey resource spread TMC resource spread ≠ No development in Principle, Partner and Engagement Management skills No “on the job training” in PMO TMC will not be able to ensure the correct development path within the company, if the Principle, Partner and Engagement Manager roles are not on-boarded. These senior and middle management roles are crucial for mentoring, coaching, IP development and IP transfer McK Principle McK Partner McK EM McK Associate McK Expert TMC Principle TMC Partner TMC EM TMC Associate TMC Expert

McKinsey resources are estimated *McKinsey resources are estimated. TMC resources based on requirements submitted Human Capital PROPOSED Resource representation @ Eskom Turnaround Programme* PMO Generation Primary Energy Procurement Claims McKinsey resource spread Proposed TMC resource spread Proposed resource distribution will enable development and growth McK Principle McK Partner McK EM McK Associate McK Expert TMC Principle TMC Partner TMC EM TMC Associate TMC Expert

Human Capital Resource representation TMC resource representation must be distributed fairly across both the workstreams and the role types TMC representation in the program PMO as well as the workstream PMOs TMC representation at Principle, Partner and Engagement Manger roles

Human Capital Resource exposure Resource request for Associates is significant: ~80% of current requirement ~60% of proposed structure Proposed TMC resource spread With a 3 year engagement, attrition of Associates will be difficult to contain. Furthermore, without diversification in assignments, TMC Associates will become specialized in their workstream and will not gain the ‘Generalist’ exposure. The ‘Generalist’ follows the current McKinsey business model with the objective of creating excellent thinkers that can be applied to any workstream in future The supplier development partnership must agree to a rotation basis of Associates, similar to current McKinsey practice 3 – 6 month roll-off and workstream transition

Human Capital Skills & Talent Development A 3 year tenure on a program is insufficient to create a strong talent pool. The supplier development partnership must agree on a fast track development process for TMC resources to grow through the development path. With clear deliverable expectations per role per workstream, the progression of resources must be tracked through a supplier-development skills development forum. Skill development will be supplemented through formal training programs as well as through the rotation system.

Supplier Development Framework Human Capital Resource representation Resource exposure Skills & talent development Company Development Input and contribution Programme Management & Involvement Information sharing Governance Partnership principles Communication

Company Development Input and Contribution The supplier development partnership will focus on the development of the business in terms of: Business structure and supporting processes Input in the selection processes Input into the human capital development processes

Supplier Development Framework Human Capital Resource representation Resource exposure Skills & talent development Company Development Input and contribution Programme Management & Involvement Information sharing Governance Communication Partnership principles

Programme Management & Involvement Input and contribution The supplier development partnership is understood in terms of: Human Capital Development McKinsey & Co have a relatively low attrition rate for a service organisation Has well established best practice training and development programs Has a rigorous selection process, and Is able to attract top talent Company Development As a going concern, McKinsey has systems, processes and tools that support the activities of their staff Through the partnership with Letsema, have experience in developing a partner consulting company TMC is a going concern and as such, has already attracted good talent and expertise The partnership must thus acknowledge the contributions of all team members equally, across the various workstreams

Programme Management & Involvement Input and contribution The supplier development partnership must treat all inputs into the delivery methodology as equal. The Supplier is acknowledged to bring expertise in terms of human capital and company development. Technical input into schedules, deliverables and any other content derived towards the objective of the workstream, must be acknowledged and respected as such. TMC will contribute towards the delivery of this programme.

Programme Management & Involvement Information sharing Input and contribution towards the success of the programme and the supplier development partnership is enabled through: Trust; Information sharing; Effective communication and; Respect and acceptance of input and contribution However, input and contribution will never be deemed value-adding if information is not shared proactively, in time and reflects current & collective thinking. Current Status Required Behaviour Information is not shared until it is “signed off” Information shared to reflect current thinking Information is not shared timeously and thus does not respect input & contribution Timelines are shared and key information is shared in alignment to schedules Some information is between the Client and McKinsey Barring internal cost management, all information should be made transparent Lack of response to data sharing requests Expectations are not managed wrt data not been available etc. All information pertaining to the scope of this project, is assets of both parties with equal rights to it Respect towards workstreams outside of this partnership is mutually demonstrated.

Programme Management & Involvement Governance The supplier development partnership has mutual interest towards the success of the programme. As input and contribution is acknowledged and respected, a formal governance process must be adhered to; to ensure alignment and agreement on critical deliverables and risk mitigation Steering committee submissions must carry the full endorsement of all parties. Any deliverables impacting the payment process, must carry the full endorsement of all parties. Any risk mitigation actions required towards the progression of the program, must carry the full endorsement of all parties. Decisions relating to formal client engagements (processes, representation, templates, content), but carry the full endorsement of both parties.

Programme Management & Involvement Communication Effective communication will build trust in the supplier development partnership. Within the respective companies, communication structures are different owing to difference in scale, size and footprint. Formal communication forums and/or platforms must be established and supported through information sharing , input and contribution to ensure its effectiveness Monthly meeting between Senior Leadership of the respective companies, ideally held prior to the program Steering committee. The interface roles between senior management and operations, must be present in these sessions to ensure that all impacted are hearing the same message at the same time. Discipline towards meeting records will be a non-negotiable. Discipline towards agenda setting and timeous information sharing, will be a non-negotiable.

Programme Management & Involvement Partnership principles The partnership does not impact the internal processes of each organisation, outside of the development scope towards TMC All other expectations and interventions must be supported through the MSA Expectations towards resource diversification must be supported by the MSA Influence in selection processes should be strictly in accordance to the supplier development scope: Information sharing of role profiles, job descriptions etc. Information sharing on best practice selection processes etc. Each company has the right to identify their own resources without rejection from the other.