And when the MD says "great idea whose was it?" who gets the 'credit'?
In November 2013 we wrote that the low hanging fruit has been picked and the next efficiency gains would come from ‘continuous operational innovation’.
Do you and your organisation have the culture for it?
We reported that between 1990 and roughly 2012, there was a 167% production cost increase, using the copper industry as the benchmark. This followed more than 10 years of production cost declines.
The full article “So you’ve done cost cutting, now for innovation” can be found here.
We pointed out that any graduate from 2000 onwards had NEVER experienced a period of having to control costs to meet the ever decreasing price received for their product. They instead spent the first 12 years of their career working in an environment of increasing commodity prices, chased by ever higher costs of production and by inference, less pressure to innovate to survive.
Roll forward to now and we pondered;
“After intense cost cutting imposed on the industry through 2012 and 2013, where would the next efficiencies come from? Who would drive real innovation when a generation of graduates never had to do it?”
The good news is ...
We’re starting to hear some creative stories again. I’ve recently read stories or had discussions with clients doing things like;
- Setting up in-house owner/contractor models
- After completing a pre feasibility, later having 33% off of the capital cost by the time a DFS was complete, simply by challenging accepted norms with questions like;
“what if we don’t assume the trucks or the mills have to turn that way?”
“do we need to dig huge holes to bury our rubbish?”
“do we have to cart all of the waste out of the pit?”
- Being vastly more flexible about where and when parts of their workforce operate from.
- Renegotiating supposedly sacrosanct royalty and debt structures that had become suppressive.
Now, these might not all work out and some might be born out of naivety, but they’re signs that the easy times are over and probably won’t return in the lifetime of those graduates from the class of 2000.
So focussing on innovation,
“How do the best companies do these things”
and
“Where do the great ideas come from?”
The solution usually comes from the middle of the table ...
I recently had a terrific conversation with an MD about the culture of innovation and how in a complex environment with lots of moving parts and inputs, it is rare that a single individual solves the riddle alone, but rather the solution often comes out of the ‘middle’.
We described it thus;
Fred said “what about we do this?” and George added “good idea but it might not work because of abc, but if we adjust the first part of your idea to look like this …” to which Patricia added “I was talking to someone during a conference last week and they found when ‘xyz’ happens they use a different concentration so let me test it with our problem and come back to you.”
So when this works, how do we answer the question when the MD comes along and asks;
“Brilliant, who came up with that?”
Workplaces with innovative team cultures w all respond with:
“No one person, it was OUR idea”.
The management consulting community will charge $000,s for advice and facilitation and in some cases you’ll get awesome value, but I think of the dozens and hundreds of small issues that need solving every day/week/month where there is no time to get a formal program in place.
What’s needed to keep the wheels of operational innovation well oiled in a complex environment such as Geology, Mining and Minerals Processing, is a culture of group innovation and sharing wins.
You will though need to be on guard for the “I”, “ME”, “MINE” types.
They shut others down and stifle the culture of operational innovation you need.
Have a go and best wishes.
My Sources:
I doubt there is an original idea in this whole article but it is a collection of my current observations, things clients tell me and stuff e ‘appropriated’ from other people way smarter than me. There aren’t many sources mentioned because I can’t even remember who I stole the ideas from. I just know they weren’t mine in the first place!
Steve Heather
On Behalf of the team at Mining People International