In late 2008, the mining industry’s bubble burst as its money supply suddenly disappeared due to a historic financial downturn. What did many mining companies learn from this meltdown? They learned simplifying work practices to improve cost structure would help regain investor confidence and mitigate future economic fluctuations. By reviewing “the way they do things”’ and investing in the adoption of efficient, effective work practices, these companies will likely outperform their peers and competitors.
The more precise term for work practices that add value to information is “workflow.” A workflow consists of interrelated activities and functions that people perform to add value to data, information and knowledge as it moves through the organization. A workflow has three key components: people, process and technology. An effective workflow will involve people executing consistent and well-defined processes that are streamlined by technology.
The first step of workflow improvement is to clearly understand the existing situation. Mapping people’s day-to-day activities and functions will create a clear picture of the interrelated processes that form the overall workflow. This exercise will identify the people, process and technology areas that could be improved to better support business performance.
How people execute a process is often captured as tacit knowledge that is not easily transferable, which is risky if key people leave the company. On the other hand, processes that are well documented and understood can be effectively transferred to other personnel within the organization. This also promotes a consistent information work practice across the organization. By capturing tacit workflow knowledge as explicit corporate knowledge, the workflow becomes part of the company’s intellectual property.
A common mistake is to take a technology-led approach to workflow improvement. The risk here is using this approach will likely derive workflow improvement from technology functionality and capabilities rather than business needs. A better approach is for technology to support and streamline the workflow as opposed to dictating how it needs to operate. The technology outcome of workflow improvement should be a clear alignment of the company’s technology investment with value added to business performance.
Merely defining and documenting an improved workflow will not impact cost structure or business performance. Rather, the organization will need to adopt an improved workflow and integrate it as part of its everyday activity.
Joint Venture Workflow Practices
The common practice of joint venture (JV) partnerships is mutually beneficial for both large and small mining companies looking to leverage resources, but it can create workflow challenges if information is not easily accessible and transparent. The decision to form a JV company will require the incoming party to analyze a large amount of existing exploration information. For example, consider a mining junior joining with a larger company to further explore a project. If the junior company has a well-defined workflow, the incoming party will be able to make a rapid and well-informed decision to initiate the partnership. This will add value to the partnership by saving time and money during the decision-making process; provide reliable data for further exploration; and enable the mining junior to be a “partner of choice” for future ventures.
Consistent Workflow Practices Across Global Projects
As companies grow by taking on new projects or through mergers and acquisitions, how exploration information is handled will become more critical to business success. The increasing funnel of information flowing from the field to corporate decision makers and regulators will put pressure on the company as it tries to maintain its effectiveness. For example, a mining company looking to expand its geographic reach may want to capture exploration information workflow knowledge from an existing well-run project and replicate those workflow practices at a newly acquired project. By mapping the company’s existing workflow as its “best practice” the organization can truly understand how the data workflow operates. The outcome will be a well-defined documented exploration workflow that can be implemented by the new project team and therefore promote consistent best practices across the organization.
Adding Value to Company Assets
During the buying and selling of mineral property, the associated exploration information can, if proved reliable, add value to the property asset. A company that has invested in adopting consistent and auditable exploration data workflow practices will be able to show information transparency back to the field data collection. This data transparency is not only compliant with CIM (Canadian Institute of Mining) best practices for NI 43-101, but it will also mean less data recollection for the new property owner.
Sustainability Best Practices
The three workflow improvement examples given above have related to exploration information workflows. This example will examine workflow improvement for Sustainability; like exploration, sustainability performance also requires consistent and transparent information workflows to support investor confidence. Sustainability practices include: health and safety; environmental management; and community engagement and development. Sustainability practices uphold the mining industry’s corporate governance obligation to provide a safe working environment for its employees and positively impact the local communities it engages with. As with the previous examples, tacit knowledge and best practices surrounding sustainability can be captured in repeatable processes that are adopted across the organization. This will give the company and its investors the assurance that sustainability obligations are implemented to a consistent high standard no matter where the company operates.
Despite the dramatic global financial downturn of late 2008, the long-term economic demand for the mineral commodities continues to curve upward. There will however, be fluctuations along the way.
Companies that invest now to understand and optimize their critical work practices will be better equipped to manage these fluctuations compared to their peers and competitors. These companies will likely maintain long-term investor confidence as they have predictable performance supported by consistent and scalable workflows that are adopted as part of the company’s intellectual property.
Christie Webb (email@example.com) and Chris Berry (firstname.lastname@example.org) are the co-founders of W-Eleven Strategic Partners Inc., a consulting company focused on the business performance of mining companies.