Canadian Mining Journal

Feature

Why complex mining projects fail, time and again

Sometimes the wrong people are doing the wrong jobs



Because mining is a complex industry, and projects are expensive and risky, every mining organization needs strong project management skills. This is the case whether the project is a new capital investment or operating/sustaining investment, and whether it’s site-specific, area specific, or enterprise-wide.

Projects often fail or underperform because companies drastically underestimate their complexity, or because the complexity does not match the existing capabilities of staff or contractors. Due to this misfit, mining projects are often set up for failure or underperformance from the get-go.

Companies often try to compensate for the unexpected complexity of a project by hiring more technical experts instead of filling gaps in management expertise. This over-reliance on solely technical expertise is a critical miss. From a management point of view, projects need simultaneous attention to many dimensions at once – people, time, cost, scheduling, leadership, etc. – yet the technical expertise of the typical vertical expert is often insufficient to handle such diverse details effectively. Evidently, there is a lack of recognition that technical and management expertise are two separate fields of competence, and both are critical for mining project success.

Strong management competencies – i.e. the ability to prioritize, gather necessary information and make the right decisions – can be developed. Technical expertise is not enough.

Addressing this critical need

As a management consulting firm that specializes in helping mining companies improve their project management practices, it is no surprise to us at Project Advisor that difficult and complex projects, whether capital or sustaining, easily go from a good idea on paper to an overwhelmed and reactive execution in practice. We see this often leading to impulsive or even chaotic management practices, which easily spiral down into crises. To mitigate this possibility, there is a need for deliberate, structured, systematic and effective project management practices to be built in by design and implemented effectively. This is not at all out of reach. Engaging management experts as a complement to technical experts, and utilizing them deliberately to increase the capability at the ground level goes a long way to foster the needed competences.

What needs to change, then, so that senior management gets the assurance they need that project decisions are timely, conscientious and effective; that key risks are addressed and mitigated; that people are engaged; that sustainable growth is facilitated and that, ultimately, shareholder and stakeholder value is added?

What needs to change is a drastic increase in the manager’s ability to design, develop, execute and control complex initiatives in a systematic and deliberate way. This, in contrast to fire-fighting, reactive or just intuitive management.

First, let’s define what effective project management looks like. Effective project management is the ability to deliver a project on time, within budget, at the quality expected. All this, in a transparent manner, where key stakeholders are made proactively aware of status, risks, issues and progress, and are never caught off guard. When in place, this effectiveness enables leaders to make timely and impactful decisions based on the right information, and the impact and disruption to other areas of the organization is minimized.

In our experience, we have found three core factors that are essential in building this management capability in mining companies:

  1. A top-down commitment to management effectiveness as a distinct discipline.
  2. Recognition and acceptance that management effectiveness is a people-centric problem as opposed to a technical, procedural, process-driven or technology- centric problem. The solution must be, therefore, focused on people’s capabilities.
  3. Prioritizing the development of management capabilities in the organization, particularly those related to bringing discipline to complex and risky initiatives.

This is even more urgent with the imminent intergenerational shift already happening in the workforce. Unless action is taken, there will be less and less experienced management talent to run these initiatives in the years to come.

In one example that we were involved with, a global mining company was having issues with the closure of a tailings dam. The closure was already many years behind schedule, risking not only their timeline, but jeopardizing effective reclamation, the company’s relationship with the community, and its social licence to operate. Analyzing the situation on the ground, we found that the organization’s staff did not have the skills necessary to define, rein-in and integrate relevant project definition, planning and management work. An over-reliance on technical internal and external experts, was evident – each advocating for more and more details (and work) in their specific areas of expertise. The frustration was high.

Through a well thought-out intervention, the situation was turned around by driving simple but effective project definition and control management processes and a deliberate increase in scoping, assurance and reporting management capabilities. Years later, the project had become a shining example of how to effectively close a tailings dam.

We helped turn the situation around by working with senior executive and operational management and getting them to commit to a disciplined approach to management. This took more than just the intention of doing so, but rather the implementation of swift and pragmatic practices such as definition, planning, assurance, control and reporting — in a way that was easy to assimilate at site, as everyone was operating at capacity.

Discipline management doesn’t have to mean complex or bureaucratic processes. A deliberate focus on people, rather than process, was applied. We focused on an intentional increase in the competence and capability of the accountable staff so that they could manage the initiative autonomously but with the right support. We focused exclusively on what was needed, based on the specific realities, as opposed to what the theoretical best practices might suggest. Over the years, this focus on management competence resulted in multiple operational benefits extending well beyond the original need.

The takeaway is that effective implementation of appropriate and fit-for-purpose management practices and a deliberate increase of the core staff’s capability completely turned this situation around.

Time and again, we’ve seen examples of this in all areas of operations: whether corporate, regional or site-specific; in operations, technical services, environment, CSR, safety or health; in extracting, hauling, crushing, processing or tailings; in new capital projects or decommissioning of operations.

First steps

As the landscape changes for miners, commitment, competence, discipline, judgment, quality management, experience, structure and effective assurance mechanisms to properly design and deploy complex initiatives becomes more important. Many elements must come together at once – and that won’t happen just because the top-of-the-house says so. They must be enabled; but how?

It all starts with having an honest look in the mirror.

As a starting point, it is essential to determine the current problem and identify the underlying root cause. This typically boils down to people’s capabilities. Once those deficiencies are pinpointed, resources can then be invested accordingly, in a targeted and calculated manner.

It’s extremely common that the wrong people are doing the wrong jobs – meaning that their competencies do not match the complexity of the initiative. This applies to both internal and external hires. A simple capability assessment can reveal the magnitude of this problem. A more competent workforce with the ability to drive complex capital and sustainment projects will enable the operation’s sustained success.

When projects are managed effectively, senior executives have access to high quality information, making the big-picture decision-making process more informed, effective and efficient. This minimizes the guessing game. It also helps assure that the key decisions and their impact are clearly understood by the right people, who are therefore able to gain awareness of, and minimize any negative impacts to other areas of the business.

This requires deliberate intent. Throughout the process, it is critical that companies have access to expert management foresight and judgment to guide them. The larger, riskier and more complex an initiative or a transformation is, the more judgment it requires. Judgment, however, is only borne out of experience.

The increasing disruption, volatility, complexity and risk faced by the mining industry makes project management effectiveness a necessity that senior management cannot afford to ignore.


Wilson Ramirez is the founder and principal of ProjectAdvisor.com, a Toronto-based specialty management consulting firm specialized in large/complex mining industry project and operational effectiveness. Their expertise includes project and operational design, assurance and capability improvement, enterprise maturity, risk management, cost-savings, innovation and safety, environment, CSR & sustainability governance. For more information, contact Wilson at wilson.ramirez@projectadvisor.com or 416-569-1002.


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