Mining companies are not fashion-driven. Despite the remarkable things they achieve, you rarely see companies like BHP or Rio Tinto talked about in the popular press. Resource companies are perceived as large and traditional, and not as cool as tech companies. While Uber and Twitter are remarkable organizations, the businesses they have built are precarious—they operate at the whim of capricious consumer markets, depending significantly on the perception of their brand. Uber and Twitter may endure, but it’s early days. In contrast, Rio was founded in 1873 and BHP traces its roots back to 1885. Further, the large mining houses operate largely out of public sight, and while their products touch billions of people worldwide, they are largely invisible to popular culture. This lack of visibility has its benefits, as most mining houses do not want lots of uninformed people opining on their extraction or refining methods; the average person simply doesn’t know what good performance and stewardship looks like. But it does hurt the industry in the battle for talent—for whatever reasons, the resources industry is not perceived as being technology-friendly.
This is ironic, because the resource industries are heavy users of technology—the mining industry pioneered the use of automated vehicles—but they don’t get perceived as sexy. This is because the approach of the mining industry is fundamentally different from Silicon Valley, for a number of reasons:
- The stakes are much, much higher. By definition, the resources industry—mining, oil & gas, forestry, et al—operates at scale, and it operates in gruelling physical environments. Huge amounts of stored energy are released in every production environment, whether from falling trees, oil under pressure, or explosives releasing tons of rock. Very simply put, the resources industries are dangerous. People can be injured or killed every day. There is an appropriate graveness about how the industry operates—things are double- and triple-checked. PPE is never questioned. Employees are disciplined or dismissed for unsafe behaviour. While there is pressure to operate economically, the first criteria for every resource operation is Safety and Environmental Stewardship. The license to operate can always be revoked, which is an extinction-level event. Put simply, resource companies have to clear a higher bar.
The stakes for a consumer e-commerce or social application are on a completely different scale. While the app market is extremely competitive and can be punishing, no lives are at stake. Accordingly, you get quotes like this from the leaders of the consumer web.
- “If you’re not embarrassed by the first version of your project, you’ve launched too late.” Reid Hoffman, Founder, LinkedIn
- “Move fast and break stuff.” Mark Zuckerberg, Facebook
- “Speed is the ultimate competitive weapon.” Loic Lemur, HootSuite
When the cost of an error is one unhappy user, these philosophies make sense. Get something into the market that barely works, acquire customers, and improve it as fast as you can. When the price of error is a Lost Time Injury, an Environmental violation or worse, these philosophies are foolhardy. Web companies can afford to be devil-may-care—the cost of failure is low. As most Silicon Valley companies fail, even having a company go bankrupt is not seen as fatal. The entrepreneur who loses a few hundred thousand dollars is seen as seasoned. On the other hand, the mine operator who tolerated sloppy safety process may never work in the industry again.
- B2C markets are very different from B2B markets. While Rio Tinto does wonderful work, very few consumers get excited about using electricity generated from Rio Coal; no one pays extra for a bracelet made from Goldcorp gold. Resource companies have fewer customers, and their buying criteria are different. Business to Consumer web companies like Facebook, Netflix, and AirBnB are dependent on brand perception, but Business to Business companies are evaluated more on performance than fashion.
Further, as consumption has moved to apps on phones, resources companies are not visible at all. Nobody (outside of a direct customer) needs a Rio Tinto app on their phone. However, resource companies have been aggressive about using technology across the organisation. A few examples:
- Big Data Analytics for exploration or maintenance planning
- Autonomous Trucks in the Pilbara and now the Canadian Oil Sands
- RFID tags to identify where every piece of equipment is or to monitor the safety of every worker
- Drones to map and measure stockpiles (Much safer, Faster, and More Accurate than sending a surveyor for a few days)
- Remote Operating Centers to make sure expert eyes are on every process in the mine
- Robotic Process Automation for simple back office tasks
- Continuous Improvement vs Disruptive Improvement. In a simple comparison, Resource companies are tortoises and web companies are hares. Resource companies have dedicated departments named “Continuous Improvement.” Consumer web companies are built on the idea of discontinuous improvement—radical reinventions and reshaping markets. Resource companies plug away conscientiously at improving operations, dramatically if possible, but incrementally as well. This results in a workplace with less drama—in a dangerous production environment, nobody wants drama.
While being perceived as cool shouldn’t matter in principle to large resource companies, it makes a big difference in the ability to attract talent. Traditionally, the mining industry has attracted the passionate and the remote—people who were passionate about the field and were willing to relocate for it, or the people who already lived near the remote production facility. However, as digitisation redefines the nature of work in resources, the industry will need to attract new pools of workers—data scientists, coders, analysts—and train up the existing work force in the new digital tools. These workers are in demand in every industry—the data scientist who can analyse exploration data to locate the best place to drill could easily be doing equally demanding and well-compensated work for an insurance company, bank, or consumer goods company.
Bridging the perception gap is not easy or simple, and we are years away from the resource industry being seen as sexier than web startups. However, there are some simple steps the industry can take now to address the whole employee value proposition: Web startups offer a lottery ticket and sexiness, and big banks offer security and higher salaries. The resource industries won’t win in those categories. Instead it needs to offer a bundle that surpasses the competition—
- Improve the perception of the industry by telling the story better— make the higher purpose of the industry more explicit. Resource companies take extreme care to preserve the environment while simultaneously providing basic needs to the entire planet. The best people want to do great work with fair compensation in the purpose of something bigger than themselves. Resource companies can offer an unusual bundle of all three. Banks or apps don’t do that.
- Get closer to the banks and exceed the web on security and salaries. Resource companies don’t need to overpay, but they can’t have an embarrassing gap with the financial services players.
- Lead the way on employee development. Offer the most interesting work and an environment where employees will learn more and learn faster. Apps are obligated to focus on solving a single problem. Banks don’t offer much more variety. Resource companies can offer a varied career with global opportunities across the value chain, from exploration to extraction to refining and even retail. Resources companies can’t pay the most or offer a chance at a huge payday, but they can offer more meaningful work and a more satisfying career path.
- Address the Tyranny of Distance. Production environments are becoming reliant on digital tools, and require people on site who can manage and operate the tools. That means two things: (1) staffing up remote production environments with a talented IT department (more than just keeping the printers running) and (2) training up the production team to the right level on the new digital technology. Both of those mean attracting and retaining Digital Talent who are willing to live (or at least spend a lot of time) in remote production environments, not city centres. There are three ways to solve this problem—improve the work experience at the production site, reduce the amount of time spent at the production site through better communication tools, or the blunt instrument of compensation. Focusing on the first will be the most productive. Production staff will rarely align well with Digital staff who don’t understand their jobs close up, and getting into bidding wars for talent is a dangerous game.
Value always flows to the scarce asset, and today, digital talent is scarce. Resource companies will not meet their goals if they don’t attract the right digital talent. The culture of our industry is different for a reason. But we shouldn’t let it hold us back from offering the best opportunities to the best people.