The mining industry has long recognised the significance of technological advancements in enhancing operational efficiency and productivity. Companies have made substantial investments in fleet-management tools and other technologies to optimise operations and gather valuable data. However, despite these innovative technologies, the mining industry struggles with low productivity levels. Recent evidence suggests that the missing piece to mining productivity lies in investing in people.
Data from McKinsey’s MineLens analysis tool reveals a concerning trend. Mining productivity dropped by one-third between 2004 and 2009, even after considering external factors like site age and geological degradation. While productivity has seen modest improvements since then, it still falls behind the potential gains offered by technological advancements. This poses the question: What hampers mining companies from fully capitalising on these new innovations?
The Human Element
One vital factor that has been frequently overlooked is the human aspect of mining operations. According to a benchmark study by McKinsey using the Organisational Health Index (OHI), some mining companies have not given enough attention to the wellbeing and engagement of their workforce. In fact, one company in the sector experienced a decline in employee satisfaction and performance, dropping from the third to the fourth quartile in organisational health between 2013 and 2016.
Organisational Health and Performance
Organisational health, which encompasses the mindsets and behaviors of a company’s personnel, has a significant impact on performance. Healthier companies not only provide higher returns to shareholders but also demonstrate improved safety performance. Though the relationship between health and performance is complex, it emphasises the need to prioritise employee wellbeing as a crucial factor in driving productivity gains.
To delve deeper into the relationship between organisational health and operational performance, McKinsey combined data from the MineLens benchmark database with OHI results from 20 mine sites worldwide. Analysing the correlations between health metrics and operational performance indicators led to valuable insights. The study focused on truck availability and equipment effectiveness (UEE) as key operational performance indicators in mining. Comparing standardised scores of these indicators with health metrics revealed a significant relationship. Mining organisations with high OHI scores showed higher levels of truck availability and UEE compared to their less healthy counterparts.
Further analysis of the OHI data identified several drivers strongly linked to operational performance. Companies that achieved top-quartile results in accountability and operational discipline enjoyed a 16 per cent higher UEE than those in the bottom quartile. Attributes like motivation and consultative leadership also showed positive correlations with operational performance. Top-quartile companies in consultative leadership achieved 9 per cent higher truck availability than those in the bottom quartile.
These findings underscore the importance of employee engagement in driving operational performance. When miners work in an accountable environment with clear expectations and transparent results, they exhibit higher levels of motivation. Leadership styles that involve and empower employees through communication, consultation, and delegation also contribute to improved performance.
Empowering Engagement for Effective Decision-Making
A real-life example from a mining company highlights the impact of engagement on operational decision-making. A maintenance team, empowered by their manager’s coaching and guidance, sought to instil a client-service culture where they saw themselves as accountable to the business. Their credibility and confidence in their work led to a critical decision to prioritise a complete repair of a plant asset, even if it meant interrupting production. This decision, supported by their credibility, gained the endorsement of the site general manager and ultimately contributed to better overall site performance.
The analysis suggests that leadership style plays a crucial role in driving mining asset productivity. Engaging and empowering those who operate and maintain the assets is as important as discipline and authority. The health of the organisation directly impacts the health of the assets and should be an integral part of any major operational improvement initiative.
Coaching: Unleashing the Human Potential for Mining Excellence
As the mining industry grapples with low productivity despite technological advancements, investing in people becomes crucial. Coaching emerges as a powerful solution to bridge this gap and elevate operational performance. By empowering employees, fostering accountability, and promoting consultative leadership, coaching can drive positive changes in organisational health and performance. Through coaching, mining companies can create an engaged and motivated workforce that makes informed decisions, leading to improved productivity and overall excellence in the industry. Embracing coaching as an integral part of organisational improvement initiatives stands as a key step towards unlocking the industry’s full potential.
Take the next step towards elevating your mining team’s performance. Book a Hello Coach demo today to see how coaching can empower your workforce and boost productivity.