Workplace 2030: Emerging business challenges and opportunities

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1 Workplace 2030: Emerging business challenges and opportunities Sinead Kaufman, managing director, Rio Tinto Coal Australia Australia-Japan Business Cooperation Committee Future Leaders Forum 8 October 2017 Good afternoon. It gives me great pleasure to spend time with you today. Rio Tinto is proud of our role as a founding member of AJBCC JABCC, and for our ongoing involvement with the Future Leaders Group. This is built on a long and enduring relationship between Rio Tinto and Japan. This photograph shows the very first shipment of iron ore from Dampier in Western Australia in Japanese steel mills were the foundation customers for our iron ore business and the relationship between Rio Tinto and Japan has grown with every passing decade. Today, we are true partners in a multitude of ways through our joint venture businesses, the supply of high value equipment and infrastructure, and key partnerships in technology and innovation. And, we continue to be Japan s largest supplier of iron ore, as well as many other materials and minerals critical to modern life. And with the economic links, the cultural inevitably follow. Page 1 of 9

2 This is the annual Perth Japan festival - a highlight of the city s cultural calendar which gets more popular every year. The minerals which have been such a big part of the relationship are also what first brought me to Australia from Europe. I began my career with Rio Tinto in the UK as a Geologist before working across the copper, bauxite, aluminium and Iron Ore industries. During that time, I have seen a lot of change, both in technology, but also in the way we recruit and organise our workforce. The changes we are seeing today feel bigger in number and more disruptive in nature. Today, I want to talk a little about the trends underway which I think will define the relationship between organisations and their workforces in the coming decade. I believe these trends represent changes which are bigger in number and more disruptive in nature than anything we have seen for more than a century. They are common across industries and geographies, but I will look at them through the lens of mining. Through the last quarter-century, the mining industry has responded to the significant global changes in demographics, technology, and the radical reshaping of the global economy from west to east. Fifty years ago, ships leaving WA carried about 50,000 tonnes of iron ore, today it s generally three times as much. Page 2 of 9

3 We used to use 50 tonne quarry trucks to move dirt and ore. These days, they are eight-wheeled giants, carrying 240 tonnes at a time. These trucks are not just huge they are smart. Ten years ago, before Google s driverless cars entered the public imagination, working with Komatsu, we began to automate these giant machines. Today, they make up about 23 per cent of our fleet. They operate on average for 1,000 hours longer and at a 15 per cent lower unit cost than a conventional truck. And just last week, our AutoHaul system in the Pilbara completed its first fully autonomous train journey almost 100km. This is all part of a giant network of 16 mines, 1,800 kilometres of rail line, four ports and - 1,500 kilometres away in Perth - a state of the art integrated operations centre. The mining workforce has been adapting for 50 years. As technology and the art of mining has changed, so have the skills they need. And now more than ever. Mine planners are increasingly software developers and maintenance engineers will be as specialised in complex diagnostics programmes as they will in understanding heavy equipment. The relatively incremental changes of the past seem fairly small when we consider the scale of advancing technology and automation. Blue collar or white, the world of work is moving rapidly. Page 3 of 9

4 As we look ahead to the next decade there are five trends in play. Firstly, businesses are going to be much more reliant on the younger end of our workforce to help us respond to the changing world around us. The current generation of senior executives in traditional industries, completed their MBAs on typewriters or, at best, word processors. The ever moving digital world is certainly not something they have grown up with. That means they are going to need some help. This is my boss Bold Baatar s - reverse mentor. He works for a tech start-up in London. Bold regularly catches up with him and finds his advice invaluable. Page 4 of 9

5 When our chief executive, J-S Jacques travels around the business, he will often spend time meeting with a group of graduate employees. This is not a gimmick or lip service it is recognition that the answers to many of the challenges we face are increasingly found in the younger levels of the business. At the top of successful organisations, we are going to see the grey suited advisors of old replaced or at least complemented by younger disruptive thinking. This is a game changer for the value that will be placed on diversity. For some time, there has been near universal acceptance of the benefits of a diverse workforce and leadership but the scale of the challenge has made it difficult to move the dial. But organisations don t have a choice any more. Members of the Gen-Z workforce expect the right to have their good ideas heard or they will take them elsewhere. As employers, we can either embrace that, or we will face a significant recruitment and retention problem. Page 5 of 9

6 When I think about my two Generation Z-ders, I am delighted that when they enter the workforce perhaps working for some of you their views will be heard loud and clear. Mining has traditionally been a pretty traditional industry. On a mine site, the General Manager has always been king or occasionally queen with a hierarchical structure below them. This model has sometimes been necessary given the challenges of safety and the complexity of production. But it has sometimes led to the creation of silos among individual sites or even teams. Increasingly, given the complexity of the value chain, we are looking at a matrix structure instead where people work across multiple teams dependent on where their skills are needed - and are incentivised based on the overall performance of the organisation. Page 6 of 9

7 That move away from rigid structures aligns with the expectations of the workforce of the future. The gig economy is pervasive and the line between professional and personal is becoming blurred even in large organisations and whatever the background, education level or vocation of the workforce. We need to embrace this spirit and recognise that entrepreneurialism can be just as powerful a force inside organisations providing we empower people to do it. Let me give you a couple of examples from my own business. This is Leonard Gould - a control room operator at Hail Creek Mine in Queensland. On his own initiative, Leonard invented a piece of computer code which has had a radical impact on the way we feed coal into our processing plant. The rollout to other sites has had a multi-million dollar impact on productivity. This is Keiran Perkins also from Hail Creek. Keiran is a mining operator who also happens to be brilliant with technology. He has been able to revolutionise the way we use technology to monitor and run the mine. Both Leonard and Keiran used skills which were developed and honed outside of work to make a huge impact on our business - in Kieran s case in an area which was nothing to do with the role he had originally been employed for. In both cases, they were given the time away from their normal duties to develop their ideas and the pay back for the company has been significant. Page 7 of 9

8 Tapping into the wider skills of our workforce is reliant on creating a genuine culture of innovation and empowerment and a willingness to move out of our comfort zones. Finally I want to talk about purpose. The arrival of Gen Z into the workplace and our reliance on them to respond to the disruptive changes around us means that competition for the brightest minds will be tougher than ever. That means defining and providing purpose. This is a journey that we have been on in the last 18 months as we have defined our own purpose building on our pioneering past and the essential nature of the minerals we produce. Page 8 of 9

9 In my 20 years in Rio Tinto, this is the first time we have defined it so clearly and the reaction of the workforce has shown the appetite that existed for it as it does in all organisations. So thank you for your time. In summation, as you lead your organisations in the years and decades ahead, you will face challenges and opportunities which are quite different to those of the past. They will require innovation and creativity and ultimately call for a different way of leading. These are exciting and pioneering times indeed. Thank you. Page 9 of 9

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