After six months of research, Stratalis Consulting presents the CEO's Agenda, part of the Global Leadership Report, in partnership with Mining Journal. The report, based on interviews and independent research with dozens of CEOs and hundreds of executives from top miners, OEMs and investors, outlines what matters most to CEOs and what they believe should matter to their successors.
In addition to in-depth interviews with leaders, our report touches on three key themes, Trust, Digital and Talent, that emerged consistently from our research and premieres our "Priorities Pyramid": a future-focused lens on what keeps CEOs up at night.
The Context
A global pandemic has changed the nature of work. Tailings dam failures have become existential threats to individual companies and the industry. Activist investors have emerged to drive sustainability agendas. Around the world, populist leaders are eager to cast the industry as scapegoats for societal ills. A long-awaited recession is underway and uncertainty continues to build within the largest economies and consumers of minerals demand. How are CEOs responding to these turbulent times and what is the path to success across a multitude of present and future challenges?
Our 2020 Global Leadership Report: The CEO's Agenda has verified in definitive terms what the industry and the ecosystem have been sensing for some time: in these transformational times, if anything is certain, it is that nothing is certain at all.
Through our in-depth discussions with our panel of leading C-Suite executives, supported by a global survey with leaders from hundreds of mining companies, OEMs, service providers and investors, three consistent themes around what matters to CEOs today, and what will matter in the future, emerged.
Theme 1: Trust
Our discussions with CEOs highlighted the importance of Trust as a critical element for sustainable success and the differentiator between companies that would flourish or struggle. Successfully navigating all five of our top CEO Agenda elements, ranging from Safety to Employee Engagement, on a path from business-stoppers to success-drivers relies on a social contract based on Trust.
This challenge of trust has been increasing in prominence in the last few years. Examples vary from miners struggling to build trust with communities and regulators through GHG reduction efforts, to attempts to attract talent through investments in safety and digital programs. A particularly interesting development at the forefront of the CEO's Agenda are efforts to build trust with investors, like the Church of England, through initiatives based on transparency and shared guidelines, such as those spearheaded by the International Council of Mining and Metals (ICMM).
What has increased the prominence of Trust in our 2020 report? Many factors play into this, at both the macro and industry level. Globally, new technologies have come into their own, with social media enabling the rapid mobilization of NGOs and communities that demand transparency from industries they view with suspicion. Unlike in years past, politicians and governments on both sides of the aisle have listened and taken aim at corporations for issues ranging from privacy to environmental policy to wealth and taxes. Closer to home, shifting investor priorities, from the rise of millennials embracing ESG investing as a lever of societal change to increasing shareholder activism, have led boards to pressure CEOs to pivot to their demands. Crowning these, at the industry level, a series of global tailings dam failures and indigenous community missteps have contributed to an increasing awareness by CEOs that the playbook for success is being rewritten in months rather than decades, and that Trust will be a necessary element to succeed.
Theme 2: Digital
Despite investments from mining companies, OEMs and consultants, the long-awaited "Digital Revolution" has not produced promised results. While there is no question in the minds of our respondents that the future is digital, CEOs and executives indicate both a frustration with and an acknowledgement of the importance of technology, innovation and digital efforts.
Many mining executives viewed the past few years as a disappointment in terms of realizing results from digital and technology efforts. While the recent reshuffling of innovation, technology and digital leadership positions across most, if not all, of the major mining companies is evidence of this wavering confidence, our executive panels did indicate a general belief that the future will require a technologically different mining company. Those that focused on this topic indicated that the winners of tomorrow will successfully operate in a more autonomous, mechanized and digital manner, invest consistently in thoughtful technology initiatives, and navigate cooled investor enthusiasm towards transformation through global recession and potentially disappointing initial outcomes.
In the past, initiatives such as machine automation to reduce costs were the focus of technology development efforts. In contrast to past down-cycles, which would have seen these types of operational innovations shuttered as willingness to invest CAPEX faltered, our research indicates that this time around, executives are instead pivoting their efforts. Digital investments have risen to the forefront, specifically those that focus on big data and the convergence of it into systems to address "human" challenges: safety and license to operate challenges through tailings monitoring and GHG mitigation; the challenge of talent through capability building and worker enhancement initiatives; and resolving safety issues, especially those arising from COVID-19.
Digital still matters, but balancing the promise of technology with the value of humanity is considered increasingly important. Advancements that build trust by both heightening human potential and transforming the enterprise are viewed at a premium.
Theme 3: Talent
This year's survey highlights the absolute acceptance by CEOs, OEMs and others that the mining industry, once inward-looking, no longer exists in a bubble. No area is more reflective of this than the challenge of recruiting, retaining and reskilling Talent. In a socially considerate, transparent and digital post-COVID world, finding employees with needed skills that prefer to join the mining industry is becoming a bottleneck to transformation.
Mining CEOs are seeing this as more than just a temporary issue, but as the key to resolving a significant future risk. While finding new graduates to join the industry is needed to amplify transformational capabilities, especially in digital and technology areas, the lack of new talent also impacts the Trust that society has in the sector. Mining has developed a reputation for being unsustainable and doing more harm than good; values that are contrary to the beliefs of many millennials. In response, mining CEOs view the recruiting of young, diverse talent that reflects the broader makeup of society as an important lever not only to changing this perception but to creating real meaningful growth for the industry.
As is clear, Talent is a critical enabler for mining companies to address the Digital Transformation and Trust challenges that they face, one that CEOs indicate will require industry-wide collaboration and messaging to be successful.
"In these transformational times, if anything is certain, it is that nothing is certain at all. The organizations that will lead through this are those that have built their strategy on Trust, with communities, with investors, with talent, and with each other."
- The CEO's Agenda, Stratalis Global Leadership Report 2020
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