Below is a simple infographic that puts the sh!tshow in context.
It’s fairly self-explanatory, but here’s how it works. It’s easiest to understand where we are and how we got here by reading from the bottom up on the left hand side (starting with the end in mind) and then reading top down on the right handside:
- Your ultimate reason for being in business is to make money and satisfy your investors, but there are other stakeholders too. You start missing your quarterly targets and guidance, and share price drops. A falling share price could make you a takeover target (remember, this might not be the case for you now if commodity prices are propping up the situation, but it could be in the near future).
- Physical targets (m, tonnes, oz, etc.) were missed because of unworkable plans, people improvise, equipment is unreliable and even when it’s up, production wastes time in shift changes etc.
- Production is a mess because systems, processes, tools
and enablers are not working for the teams. - Systems are a mess because people are confused about what the priorities are today (since they change every day) and work in silos. This is not creating a great workplace
culture! - People not working effectively and the culture is a mess because leadership lacks the ability and competency to
lead and productively manage their teams. - Values are disconnected from the strategic intent and have not been clearly communicated, or translated to behavioural expectations. So the values remain unclear and only live on the company website, instead of in the people’s hearts and minds. Ultimately, the values have not defined the desired culture or the recruitment process, so we end up with a culture where ‘anything goes’.
When commodities are high you still have healthy profit margins. But no matter how well things are going today, we all know that sooner or later commodity prices flatten and retreat, affecting your margins. It’s easy to see why a lot of mines struggle in a falling or low commodity price environment.
Most mines try to front-run this drop with Business Improvement projects, yet, despite all the good intentions and a lot of people going above and beyond, successful BI projects are few and far between.
