Thursday, 19 September 2019
Radical Innovation in Mining Management Article 3: The Ecology Age - Stability + Agility
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Radical Innovation in Mining Management Article 3: The Ecology Age - Stability + Agility

This was originally published by Gary Wong and Hendrik Lourens, Stratflow Australia.

In the last two editions we discussed how yesterday’s solutions have led to 2 myths that control current mining thinking.

Myth 1: The best way to run a mine is to focus on cost certainty and manage people as if they are parts of a machine.

Myth 2: Mine operations should be optimized from start to finish to produce the best results.

In this article we examine Mining Differently in the Ecology Age. Complexity Thinking takes Mining beyond Systems Thinking.

This lengthy article may be covering a lot of new ground for readers. So here’s a quick summary:

1.       Open both eyes to see the real world.

2.       The secret sauce is Stability + Agility.

3.       Forget about creating culture, social license to operate and safety; all are emergent properties of a complex adaptive system.

4.       Shape your mining operations by doing what comes naturally – storytelling.

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Today we are coming out of the second “yellow bubble”, a mix of Classical Management theory from the Industrial Age and Systems Thinking with the notion we can engineer technology-process-people linear systems from start to finish. Now stir into the mix an ecological perspective vociferously highlighting why some problems remain unresolved and are causing to new ones to emerge. For example, with a cradle-to-grave mindset what does Social license to operate really mean? Does sustainability have a chance? Is a circular economy[1] in mining viable or will the concept be duly crushed by short-term profit seekers? These are higher-level industry questions that won’t go away. For this third article, we’ll examine them at the mining operations level.

Three Systems in the Real World

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To understand what’s going on requires “opening both eyes” to see three systems: Order, Complex, and Chaos. 

With only one eye open in the Industrial and Information ages we saw machines and humans behaving in stable, repeatable, predictable environments. Exploiting the idea of Reductionism, a system could be reduced into process, technology, and people parts, root cause and effect relationships found, parts fixed, and the whole re-assembled. We strive for Stability with operations running smoothly like clockwork in a sea of calmness. Best Practices and Optimization are primary drivers in the Order system. Looking in the rear-view mirror, one can comprehend how Myths 1 and 2 seized an opportunity to dictate in the Order System. We have explained though by thinking differently how organizations can overcome the myths and even reap more benefits from a stable production flow.

Chaos is very dynamic and volatile. Everything is random and cause & effect relationships don’t exist. Entering the Chaotic system is typically accidental; it’s an unexpected surprise like falling off a cliff, the Edge of Chaos. We strive to escape as quickly as possible by returning to the Order system (Recovery) or moving into the Complex system (Exploration). Being in Chaos is temporal – you do not stay there for any length of time. If you don’t act immediately, somebody or something else will and the situation will change.

Unlike the Order system, the future is unpredictable in the Complex system. It feels like Chaos with confusion and uncertainty but with one important difference: Some semblance of Order may exist in the form of underlying patterns. Complex patterns in nature have been discovered in clouds, coastlines, beaches, trees, leaves, seashells. We can recognize likenesses across a complex system and come to some understanding of the whole without dividing it into its parts.

We are interested in a special type of complex system - a complex adaptive system (CAS). A tornado is a complex system; eventually all energy dissipates and it naturally dies out. In contrast, a CAS adapts to survive changing conditions. Birds flock, fish swarm, ants colonize by following simple rules to survive. Humans form tribes and gangs. After a company restructuring that breaks up silos, it’s common to observe informal networks like cliques, coffee clubs, meetups later reappearing, a complexity phenomenon called self-organization. The mining industry is a CAS interconnecting companies, customers, suppliers, agencies, communities and each is a CAS in its own right.

In the Complex system, we strive for Agility to make sense of dilemmas, paradoxes, and conflicts so that we can decide and take action. In the Ecology Age it’s not Stability or Agility but both/and.

“Agility is the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment. Agility is not incompatible with stability—quite the contrary. Agility requires stability for most companies.

Agility needs two things. One is a dynamic capability, the ability to move fast—speed, nimbleness, responsiveness. And agility requires stability, a stable foundation—a platform, if you will—of things that don’t change. It’s this stable backbone that becomes a springboard for the company, an anchor point that doesn’t change while a whole bunch of other things are changing constantly.”[2]

Agility in the Complex system involves launching small trial & error experiments to learn, monitor consequences, and adapt the social license.

“Authors in the field of complexity in the public sphere “identify common themes such as the impossibility of prediction and therefore the need to adopt more experimental approaches to intervention based on the assumption that there will be new phenomena (unknown unknowns) likely to emerge endogenously.”[3]

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One more key point about Complexity. We do not create stability nor agility. They are emergent properties of a CAS. What we create are the conditions that enable them to emerge.

“Agility is an ‘outcome and not a goal’. If you focus on 'doing' agile you'll miss the whole point of delivering value to your customer more effectively, and if you fail to become agile as an organization, you'll fail to address the reasons you are not agile to begin with.”

                                                   Nigel Thurlow, Chief of Agile – Toyota Connected

And as we learned from the myths, the wrong conditions like extreme bureaucracy can be harmful and allow instability and paralysis to emerge.

Culture Change in the Order system

In the Order system the constraints are so fixed that all behaviour is predictable. Causal relationships exist. In the Information age, several mindsets have persevered: Culture is the way people behave around here (when Management isn’t looking). Culture can be created. Only Top Management can modify their organization's culture. Senior leaders craft 'value statements' that outline how they want people to behave. Focus on individual habits. Change culture one person at a time.

A scene frequently played is a company transformation program launched with culture change leading the way forward. The change hypothesis is: If we can change worker behaviour then we will achieve the desired results. Culture change requires defining an ideal future state, designing a roadmap, setting explicit milestones, and aligning people to close the gap. Scaling means if the desired behaviour changes works in one context, then it will work in another. Aggregation is the corollary of reductionism. Copy. Paste. Integrate.

The Order system assumptions have led to the third myth:

Myth 3: We can achieve social licence acceptance and safety aims within our current management paradigm by pursuing effective culture change.

Culture, social license acceptance and safety are complex issues; all are emergent properties of a CAS. It’s not a simple matter of closing the gap between a predicted future and the present. In the Ecology age, evolving the present to construct a new direction is more important than creating false expectations about how things could be in the future. You make sense of your current situation and see what you can change. You define an exploratory path and a speed of travel, not outcome-based targets.

Social License to Operate

The Productivity Platform described in the previous article creates the conditions that enables Stability to emerge. It frees up time for managers to pursue Social License to Operate issues with Agility. And it couldn’t come at a better time. According to Ernst & Young:[4]

“Surveying over 250 sector participants from around the world, we have seen ‘License to operate’ rocket to first position, with over half of our respondents nominating it as the No. 1 risk.

  • It is the key risk that CEOs and boards are discussing because the current approach is not broad enough, the stakeholder landscape is changing and miners need to adapt.
  • We have seen the advance of nationalism globally.
  • The necessity of digital transformation highlights the need for a stronger license to operate.
  • The sector is working to redefine its image as a sustainable and responsible source of the world’s minerals. But while many in the industry are saying all the right things, their actions do not follow their words, and the many stakeholders are not fooled.
  • License to operate has evolved beyond the narrow focus on social and environmental issues. There are now increasing expectations of true shared value outcomes from mining projects. Any misstep can impact the ability to access capital or even result in a total loss of license.
  • Mining and metals companies need to transform their business models to remain more competitive and bring all their stakeholders along on the journey. A new approach is required, and license to operate needs to quickly become part of a mining company’s DNA in the same way as safety is.’

The stakeholder landscape is shifting. There is more information, bigger platforms and more at stake than ever before. Underestimating the power of each and every single stakeholder would be a mistake.”

Look no further than the social and environmental controversy over bringing the Adani Carmichael coal mine project on line. It highlights the political divide in Australia in mitigating climate change. Carmichael is seen as the thin edge of the wedge. Adani would blaze a trail for six other potential mines in Queensland's Galilee Basin.

Social License problems can dramatically impact mines in production. Dozens of people were injured in clashes between local residents and workers from a Chinese company at a gold mine in Kyrgyzstan’s Naryn province.[6] About 500 local residents gathered near the mine on August 5 and entered the construction site attempting to seize several trucks belonging to the company. The locals blamed the Chinese company for the mass death of livestock, saying the mining firm has contaminated the local environment. The Prime Minister of Kyrgyzstan released the following statement:

“The problems that exist in the field of the mining industry today have accumulated over the years and require serious rethinking and decisive actions. I want to stress: if investors violate the requirements and rights of our citizens, we will take appropriate measures against them. But everything should be within the law. If people demand to close the enterprises because of each such incident, then all investors will turn away from us. The actions of individuals who want to take advantage of this incident instantly jeopardize what we have achieved through great efforts.”

We totally agree the current approach is not broad enough, the stakeholder landscape is changing, and miners need to adapt. But not an approach engrained in the Order system.

You don’t manage Social License to Operate. You don’t make a list of activities, establish KPIs, and measure performance. You do more than listen to the loudest and most important voices; you listen to them all. You don’t make promises you can’t control and then assign blame or find excuses when not delivered.

“The Social License has been defined as existing when a project has the ongoing approval within the local community and other stakeholders, ongoing approval or broad social acceptance and, most frequently, as ongoing acceptance.

...Social License is rooted in the beliefs, perceptions and opinions held by the local population and other stakeholders.

...Social License has to be earned and then maintained.”[5]

Could a mine in Australia be nearing a Social License tipping point? Whether you agree or deny, you won’t really know until you fall over the Edge of Chaos. Human tipping points can’t be seen. Clearly the aim is to proactively avoid plunging into the Chaotic system. A new approach will require thinking differently. It starts by not giving Social Licence to Operate lip service as one more business risk to be avoided but as an emergent property of a CAS.

An Anthro-complexity approach

Traditional techniques such as Likert surveys and questionnaires do not function well in the perpetually changing Complex system. The length of cycle time does not pass the Agility test. Professional time is needed designing the survey instrument, obtaining approvals, collecting, analyzing, and reporting data. Information is predominantly numerical with bar charts and pie graphs. It’s difficult to explain “what a composite 3.7 score out of 5” really means. Comments submitted may shed some light.

Interviewing involves considerably more time. To manage costs, the number conducted is limited to a selected few; who decides on the sample size can become a point of contention. Interviewers unconsciously (or deliberately) inject their own cognitive biases when preparing the set of questions to be asked. Will the findings truly reflect what was said or simply be an exercise to validate pre-determined conclusions? How is accuracy affected since data is filtered by an analyst’s interpretation? Is there sufficient information in the snapshot-in-time report for decision-makers to act upon? If a month or two have passed, is it still valid especially if new events have occurred?

The writing practice is to include a few respondent comments and quotes in reports. Because they add qualitative depth and meaning, considerable weight is given to them during discussions. However, there’s a risk when decision-makers are restricted to what biased analysts pick and choose as worthy information. And the risks are ominous - taking ill-fated action predicated on a misunderstanding of community feelings, creating an unintended uproar, further damaging social license trust.

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Fortunately, there is a better way.  One that has been used globally by military, government, non-profits, private companies for the past decade. The Narrative SenseMaker® tool and process developed by Cognitive Edge[7] uses design principles based on natural science, complexity thinking, and from anthropology a branch called ethnography.

A story is an event that a person experienced first-hand or heard about. A narrative is how that story is shared. Humans are natural storytellers and narratives are ideal for making sense of complexity because they include context. Narratives can be collected from anyone located anywhere who is willing to share good and bad experiences about mining operations.

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The approach enables storytellers to self-interpret their experiences, giving them the power to tell us what those narratives mean, rather than handing over that power to researchers or computer algorithms. Data visualization tools input stories as data points to generate 2D contour maps called “narrative landscapes.” In the sample map shown, decision-makers can see the direction heading (top-right corner) and navigate on the social license journey. If a question arises about the location of a data point, a simple click pops open the story for reading. This feature is called “disintermediation” and provides a direct line-of-sight connection between storytellers and decision-makers. You can’t beat this for authenticity.

There are resilient organizations who use Narrative Sense-making on a real-time 24/7/365 basis to monitor shifting customer, employee, investor, supplier, stakeholder dispositions. One company does continuous mapping of unarticulated customer needs on the lookout for clusters. They put prototyping teams to work on a cluster to see if it is worth addressing the need discovered. Resilient means anticipating and proactively getting in front of the situation. In today’s reality diverse social media events on Twitter, Facebook can go viral as they are fueled by the Internet’s fast feedback loops. People are attracted and self-organize into advocacy and protest groups. Actions are irreversible. - you can’t take them back like you can in the Order system. These are all phenomena of complexity.

Culture change in the Complex system

Unlike the Order system, the future is unpredictable in the Complex system. That includes human behaviour. People are not logical, information-processing machines. We are irrational, emotionally-charged pattern recognizers. Each of us in varying degrees is mentally infected by over 100 cognitive biases and physically by inattentional blindness - we do not see what we do not expect to see.

Think about the last time you heard a presentation announcing a new change initiative. From Cognitive Science research on inattentional blindness people hear about 5% of what was just said. Brains autonomically begin comparing against the most recent experiences. While still processing, you hear: “If we do this, then in x year’s time look at how wonderful life will be! Any questions?” After answering a few queries emanating from “first-fit” pattern matches, leaders exit feeling confident the big launch was a success. But actually people are still processing, searching for a “best-fit” match. First-fit pattern recognition is “Thinking Fast” while Best-fit is “Thinking Slow”, two modes of thought analyzed by Nobel Memorial Prize in Economic Sciences laureate Daniel Kahneman.[8]

Thinking Slow happens when people later meet to chew over the new initiative and share stories. As a survival mechanism, the brain is naturally geared towards recalling stories of failure and bad experiences. Feedback loops tend to amplify negative feelings into powerful forces. They can range from “No way we can do this!” anger to “Here we go again” resignation. The ethnographic practice called Appreciation Inquiry is a noble effort to balance the overwhelming negativity with positive stories about good memories. With the anthro-complexity approach, it is what it is. Negative plus the positive. Whatever is in the Yellow Bubble.

We shape behaviour from a natural science perspective. We focus on the system, not humans. We pay attention to system relationships and interactions. Dialogue shifts from unpredictable human behaviour to predictable system conditions humans face every day. As noted by James Reason: “You cannot change the human condition, but you can change the conditions in which humans work.”[9]

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Conditions include business policies, standards, processes, rules, and so on that impact humans. Reinforcing or relaxing constraints will influence relationships and interactions and thus behaviour. Stories provide the context why a person decided to behave in a particular way. Because narratives are emotional experiences, they offer insights into attitudes and mindsets, the core centre of personal change.

We can view Culture as the emergent set of stories acted out every day. A 2D narrative landscape produced from stories is a partial representation of the culture. Because it’s a complex system, we can recognize likenesses and come to some understanding of the whole without dividing it into its parts.

The intervention question now becomes: What system constraint might we change to get more stories like these and fewer like those?  It is much easier to say “it’s like one of these” than to articulate the specific qualities of a problem.

Safety in the Ecology Age

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Safety maps can be easily generated using the accustomed Narrative Sense-making tools in place for Social License to Operate. In this example, one cluster (brown area) requires immediate attention. Why are workers getting the job done but not following the rules. Is it workarounds? Shortcuts? Clicking on a dot and reading a story in a cluster provides contextual information.

Because attention is on the system and constraints, storytellers feel psychologically safe to participate without any fear of reprisal.

Safety is an ethical responsibility. There is the belief that the only ethically and morally acceptable accident goal is: Zero; that is, one absolutely cannot allow harm, injury, or disease. On the other hand, how realistic is it to demand perfection from fallible humans, machines and systems? Known as Vision Zero, other labels frequently used are Zero Accident Vision (ZAV), Zero Harm, No Harm.

Professor Rob Long laments: "No other concept in safety has ever caused more divide, debate and long term damage to safety than that of Zero Harm." [10]  There are, however, some merits about Zero as stated by Sidney Dekker “…in a complex, dynamic, resource-constrained and goal-conflicted world, zero is not an achievable target, but a zero commitment may be worth some encouragement.”[11]

We can take the air out of the controversy by viewing Safety as an emergent property of a CAS. The Vision Zero debate is avoided because safety isn’t measured using accidents as Safety KPIs. In its place is the ongoing monitoring of conditions that enable safety to emerge. The green area on this particular narrative landscape displays the vector direction towards Zero Vision. Progress is denoted by the visual shifting of clusters with more stories here, fewer there.

The End of the Beginning

As one of over 3,000 readers following the series, thanks and we hope you’ve enjoyed the ride in our attempt to explain how we got to Now. Hopefully we have been able to weave together the importance of history and making connections to one’s roots. We’ve probably missed a few stitches and made some mistakes but in the Age of Ecology, we accept people aren’t perfect machines. We are fallible and will make errors.

By examining the Mining Industry’s historical patterns, we have a better understanding what the deep value streams are in what we do today, what we need to preserve for the future, and what we must let go from the past. What remains become the foundation on which new ideas will be born.

Mining has had its share of successes and failures. One thing we can say with certainty about an unpredictable future is that the “2 steps forward, 1 step backwards” learning pattern will continue. We are learning how to learn, experientially.

We have no idea how long the Age of Ecology will last. All that we know is something better will eventually come over the horizon. So stay focused managing the evolutionary potential of the Present and keep an open mind to detect the emergence of the next Age.

Upcoming webinars and workshops

 A video recording of the 1-hour Mining Differently webinar delivered on August 29 will be posted on the stratflow.com.au website and YouTube. Hendrik Lourens and Jason Eagleton identified the fundamental constraint shackling employee and mine performance. The good news was this has been overcome in more than 90+ mine interventions.

We will host our second Mining Differently webinar on September 25. This one will deal with Ecology age issues: social licence to operate, safety and cultural aspects that are rising in importance.

We are also conducting 1-day Mining Differently workshops on October 31 (note change to Melbourne) and November 8 (Brisbane). The workshops will include exercises to practice the Theory of Constraints and Complexity thinking. To be added to our invitation list, please contact Hendrik Lourens at hendrik@stratflow.com.au.

For readers with a particular interest in safety, Gary Wong will be delivering 2-day Adaptive Safety workshops in Brisbane (Nov 6 & 7) and Auckland (Nov 10 & 11). Please contact Gary Wong at GaryWong@gswong.com for registration information.

Written by Gary Wong and Hendrik Lourens

References

1. What is Circular Economy? http://bit.ly/2YsOD5Z
2. Agility: It Rhymes with Stability. McKinsey Quarterly, Dec 2015
3. Top 10 Business Risks facing Mining and Metals in 2019-20. Ernst & Young, 2019. https://go.ey.com/2YrMlEd
4. Complexity theory and Public Management: a 'becoming' field. E. A. Eppel and M. L. Rhodes, Public Management Review, vol. 20, no. 7, pp. 949-959, 2018
5. Kyrgyzstan: Locals clash with Chinese mining company workers. http://bit.ly/2T8UwnV
6. What is the Social License? http://bit.ly/2YvdAOf
7. Disclaimer: Gary Wong is associated with Cognitive Edge as a Cynefin trainer but not as an employee. https://cognitive-edge.com
8. Thinking, Fast and Slow. Daniel Kahneman. 2011
9. Managing Maintenance Error: A Practical Guide. James Reason & Alan Hobbs. 2003
10. For The Love of Zero: Human Fallibility and Risk. Rob Long. 2012. http://bit.ly/2TcbVMA
11. Zero vision and a Western salvation narrative. Sidney Dekker, Robert Long, Jean-Luc Wybo. 2015 http://bit.ly/2TeT3fF

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