The Innovation: State of Play report CEO Insights highlights the continued difficulty mining companies are having in building agility into their businesses while also managing unprecedented cost cutting.
VCI director and report co-author Dr Graeme Stanway said many CEOs were coming to a similar conclusion: the only clear path to growth was by building competitive advantage through technology.
“The impossible to ignore advances in sensing, data and analysis technologies have seen the industry mindset change from seeing these technologies as inherently flaky and high risk to being a strategic imperative,” Stanway said.
“It is now also seen, ironically, as a core element in managing risk – albeit now the risk of being disrupted.”
Stanway said mining executives were learning how to build agile and adaptable systems to deal with unexpected consequences.
The most important aspect to achieving this end-to-end state is to balance the twin imperatives of “top down technology strategy” with “bottom up engagement and incentives”.
“Designing and implementing a successful top-down program is often best executed in larger companies,” Stanway said.
“It requires a structure and investment aligned with the business strategy that is able to drive big platform shifts.”
According to Stanway, two broadly recognisable examples of this approach are Rio Tinto’s Mine of the Future and AngloGold Ashanti’s Technology Innovation Consortia.
He said both clearly aligned a top-down approach with their fundamental business strategy and needs.
“On the other hand CEOs who tend to embed the best bottom-up programs are the smaller or mid-tier companies, which are less bureaucratic and willing to provide more autonomy to their workforces,” Stanway said.
“Success is a product of a clear broad intent, culture and incentives.
“A fantastic example of this approach is Dundee Precious Metals, which has doubled production with no increase in workforce or major machinery.
“CEO Rick Howes put the digital building blocks in place and gave his workforce the space to innovate.”
Perhaps the biggest insight from the report is that there is a direct correlation between the successful implementation of innovation and the propensity of an organisation to take a leadership role in its state areas of competitive advantage.
The CEO Insights report provides analysis and commentary on exclusive interviews with CEOs and board members from 15 of the world’s top mining companies. Those companies include Rio Tinto, BHP Billiton, MMG, Roy Hill, Antofagasta, Newmont and South32.
For more information or to buy a copy of the report, click here.