Don’t Digitise Your Rubbish: Integrate, Simplify, and Systematise Your Operations First

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Copyright © 2022 Andy Sherring

All rights reserved.

First Edition

ISBN: 978-1-5445-2813-7

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Contents

Introduction

1. The Industry Has a Serious Problem and Is in a Vulnerable Position

2. Structural Weaknesses Need to Be Addressed

3. The Operational Basics Need to Be Taken to a Whole New Level

4. Integration Provides the Missing Link for Transformational Change

5. A Five-Step Guide for Integrating Your Business

Conclusion

Summary

Acknowledgments

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Introduction

The mining industry has a problem. It is facing a period of major technological and social change, which it is not currently ready for. There is huge value at stake for mining companies and for the industry as a whole. The next five to ten years will prove to be pivotal in separating those who proactively prepare well for this change, and those who wait for the change to happen to them before reacting.

For senior decision makers who have the authority to drive transformational change, this book is essential reading. For anyone in, or aspiring to be in, a leadership role within mining or a similar operational industry, you will certainly also benefit and find it to be of great interest.

The mining industry is not unique in its failure to prepare adequately for change. But in over four decades of experience along my journey in operations, I saw issue after issue. I was always struck by the lack of consistency of approach from an operator’s perspective. Misalignment and fragmentation of effort, siloed thinking, self-serving behaviour, reinventing the wheel, and a short-term focus were consistently problematic. These, of course, are natural challenges in a large business, and I have grown to see that the same exists in most large operational businesses across the world. Only the degree of dysfunctionality differs.

However, many of these problems just seemed so basic, especially for large and sophisticated corporations. Things like having some level of standardisation across the business, with respect to systems and processes, organisation models, and even operating philosophies. These mostly didn’t exist, and when they were implemented, they generally fell by the wayside some years later. What this led to was a reactive approach to doing things and a constant reinventing of the wheel every time a new leader arrived. Too often, the new leader would commence in their new role by throwing out everything that the previous manager had done, then starting from scratch, using their own personal past experience. Nothing systemic, nothing sustainable, and nothing that encouraged continuous improvement over time.

It always struck me that there had to be a better way than this. I was internally driven by the challenge to define what that ‘better way’ actually was. I saw it as a profoundly important issue, yet no one seemed to be interested in cracking this conundrum. Maybe it was put in the ‘too hard’ basket. In any case, it had somehow just become the accepted norm. The attitude seemed to be, ‘Well, that’s mining’.

Perhaps the problem, at its core, is that the senior operational leadership of businesses are so caught up in managing short-term challenges today that they simply don’t have the headspace to think about long-term, systemic, sustainable change. This is not meant as a criticism, because it is a fact that frustrates most leaders in the industry. But it must be said. It is a clear indication of the vicious circle that these senior leaders currently find themselves stuck in. Over the past two decades, for all sorts of reasons, the focus of business unit CEOs and their teams has shifted from ‘long-term shareholder value’ to ‘short-term share price’. They pursue lots of short-term improvement initiatives and regular organisational structure changes, but somehow nothing that truly turns the dial.

Illustrating this, the mining industry as a whole has seen a substantial decline in productivity over the past twenty years, much more than can be explained away by declining ore grades. And that is in the face of better equipment, better technology, and vastly more data and analytical capability. It is a sad fact that the business improvement goal of most mining companies today is to get back to the productivity levels of fifteen to twenty years ago. Something is wrong with the current approach. It is not working.

The world of operations has changed profoundly over the past twenty years. The ‘complexity’ of the role of, say, a mine general manager (GM) is completely different today than what it was in the past. And the ‘capability’ of their management team is typically completely different, due to shorter tenure and much less depth of local knowledge and experience. These are largely just an unavoidable reality of a changing world. However, what is crazy is that businesses have not changed their operating models. The complexity and capability combination has had a double-whammy impact, yet businesses continue to follow the same approach they always have—the same approach to organisational change, operating models, and business improvement that has not delivered systemic, sustainable improvement over the past twenty years.

And now we have the rapid explosion of technological advancement to add to the equation. Everyone knows this is real, and it’s coming fast, but anyone with any appreciation for the current realities in operations knows that technology is not a silver-bullet solution. They know they have to embrace the future, but they also recognise that digitising poor operating practices is not the answer. It will just automate those weak practices. Hence, the title of this book: Don’t Digitise Your Rubbish!

There is a need to fix the basics first. Doing this in the right way will bring greater clarity, focus, alignment, accountability, and discipline to the operations. This book discusses the changes in the industry in detail, and presents a solution: a better way of setting up operations and businesses, which not only addresses the problems of today, but also provides a solid platform for the future.

The key missing link is integration. It is what lies at the heart of most problems facing large operating businesses, and it is also the perfect vehicle for driving the necessary change.

It helps leaders become crystal clear on the business strategy and operating philosophy; then it creates a working environment (both organisational and physical), which aligns everyone and everything within the business around delivery of that strategy. In the process, all other obstacles, clutter, and bureaucracy standing in the way of this are identified and removed. In short, the process makes it easier for everyone to do their jobs effectively, by integrating, aligning, and simplifying everything that is being done.

Implementing a fully integrated operating model across your operations will create a better, more systemically focussed organisation, which is capable of much greater things than it is today. It will position you for better performance in the short term, and it will prepare you well for the digital future. It will liberate substantial latent untapped value, which lies stuck in all the countless interfaces across your organisation. It will pull your teams together around a common drumbeat, which optimises the performance of the operating system as a whole. It will also inspire and enable them to do their jobs more efficiently and effectively.

This book will show you what this involves and how to go about it. It presents a practical solution for setting up operations and businesses for short-, medium-, and long-term success. It is written from a position of operational empathy, not from the perspective of technical theory. It will guide you through the problem, the challenges, and the solution, including: why the industry has a serious problem; why it’s in a vulnerable position; what are its structural weaknesses that need to be addressed; what is the detail around the operational basics that need to be taken to a whole new level; why and how integration provides the missing link for transformational change; and it concludes with a five-step guide for integrating your business.

It is structured to make it easy to read, and the key points are made clearly. In each chapter and section of the book, the industry observations are highlighted, the key principles are discussed, and a solution is provided. This is followed by a useful checklist of questions for the reader to consider, with regard to their own business and/or operations. And each section includes a powerful illustration that visually captures the key points from the section.

My background has perfectly prepared me to get to this place where my business and I now specialise solely in integration, and we have developed robust solutions for long-standing industry issues.

I had a twenty-eight-year career with Rio Tinto (a leading global mining group), working in operational roles across the globe, from copper in South Africa, to salt in Australia, to coal in the US, and back to Australia in technology and innovation, and then iron ore. My last role with Rio Tinto was to lead the design and delivery of the groundbreaking and highly successful world-first remote Operations Centre for the iron ore group in Perth. This was a catalyst for me, and I felt we had just cracked the door open into a whole new world of opportunity related to operational excellence, which went far beyond just a ‘centre’ and was much deeper than just the integrated planning function that accompanied it.

I then went into independent consulting, focussing solely on this subject. I consulted to around twenty-five of the major mining companies around the world, working across a diversity of different commodities, applications, and cultures. Over a period of five years, I began to really understand what this ‘better way’ actually was. I wanted to know: What are the key principles? Why is this important? Why wasn’t it important previously? Why is it so critical an issue right now? What is involved in fixing this? What key elements are involved? How do they all fit together? How do we approach the solution? And most importantly, I got to drill down into the detail of what this actually looks like in practical terms. So much of the consulting industry is about high-level concepts, which are sound in logic but designed and delivered by people who don’t understand the detail of the practical complexities. As the saying goes, ‘Nothing is impossible for the person who doesn’t have to do it’.

Through this journey, I discovered that the solution was all centred around integration, and I began to broaden my thinking well beyond just that of an Operations Centre. It became clear that what was required was a fully integrated operating model, and I focussed my attention on defining that. However, the closer I got to finalising exactly what this looks like, the more I came to realise it was worthless unless you could shift the mindset of the leadership team and take them on the necessary journey of transformational change. So, at this point, in 2015, after five years as an independent consultant, I partnered with the best transformational change consultants I had personally ever come across, to tap into their decades of experience in the area of leadership-led, codesigned transformation. And we co-founded NextGenOpX (which stands for ‘next generation operating platform’), a management consulting company with a difference.

Combining our uniquely holistic, integrated operating model with the leadership-led transformational change capability, and backing this with a group of deeply experienced operational thought leaders, it has proven to be a knockout combination, one that is unmatched anywhere globally. We have subsequently demonstrated our ability to successfully deliver large projects on a global scale with major mining clients, including:

developing a ‘future operating platform’ for various large mining companies;

managing the global integration of companies following an acquisition/merger;

and implementing a fully integrated operating model across multi-mine operations.

The depth of experience and detail developed as part of these and many other case studies has allowed us to develop a comprehensive understanding and methodology for designing and implementing fully integrated operations. In other words, there is real substance behind everything written in this book.

What drives and motivates us is the need (and opportunity) to change the industry for the better.

The book is based on this deep operational experience across the mining industry. It is based on observations of what works well and what doesn’t; what companies do well and what they don’t; what has changed and why; and most importantly, deep insights on what could and should be done better and how. I have been at the forefront of the subject of integration for over fifteen years now and have dedicated this time to developing deeply thought-through solutions, not just vague concepts.

This book is aimed at the mining industry and largely uses mining examples, because that is where my experience has been. However, the principles of integration are generic and have proven to apply in many industries and levels of complexity. You can apply them to the way a global corporation is set up, or to a single operation, a department, or a support function, whether it is in mining, oil and gas, utilities, or a service-provider business. The principles of integration should form the basis for ensuring alignment, integration, and excellence within every business. Although the principles were developed and refined empirically through a decade of multiple, diverse applications, they align well with most management philosophies, but also introduce a significant number of new insights and design principles.

At times I present quite a critical view of the mining industry. Some comments may come across as harsh, and some points are stated bluntly for effect. But the