2019 survey data pack€¦ · • alister macpherson: general manager, caterpillar (westrac) •...

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© VCI Australasia Pty Ltd as trustee for VCI Unit Trust 2019The author’s right to be identified has been asserted

STATEOFPLAY.ORGC O P Y R I G H T © 2 0 1 9 – A L L R I G H T S R E S E R V E D V C I P T Y L T D

2019 Survey Data Pack

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1. ABOUT STATE OF PLAY

2. DATA PACK

Overview

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800+ Respondents to the 2018/19 survey

60 Countries represented in 2018/19

13 Commodities represented in 2018/19

70+ CEOs & Board members interviewed since 2013

$800bn Combined market capitalisation of interviewed companies

399 Companies in 2018/19 survey

68% Of respondents were executives in 2018/19

‘What this survey really does is drive an arrow through the major mining innovation issues. I hope people pay a great deal of attention to it’

– Mining CEO

State of Play – largest mining survey in the world

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We are striving to create an independent, standalone platform to support discussion of innovation at a strategic level, uncover fundamental insights into the industry dynamics and identify trends in how

businesses are establishing competitive advantage

High capital, long lifecycle investments and significant market

risk

Community integration across countries and regions, often as an

alternative to government

Gap in available literature, most of which focuses on consumer or

technical innovation

What differentiates strategy and innovation in the primary industries…

Our aspirations for State of Play

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OPENNESS

KNOWLEDGE CAPABILITYOur roots are in the development of strategy for businesses in the primary industries, giving us a great

foundation of knowledge and an extensive network

We find and ask global experts and senior business leaders their perspectives to challenge our own thinking as well as others

We hire the best students from leading universities, train them in our strategy advisory business and give them autonomy

How State of Play consistently produces quality insight

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State of Play’s innovation return metrics

Total shareholder returnsShare price + dividends

Over a four year periodDec 31 2014 – Jan 13 2019

Risk adjustedTo account for volatility

Company PerformanceRelative to share market

returns

1

2

3

=

We hand picked

15 global companies

and measured their individual innovation perspective

17 commoditieswho manage over

Relationship Analysis

The rest of the industry relies on flawed approaches:

Mythologies

Academic papers

• Relies on anecdotal evidence and industry “best-practice”• Skewed by personal experiences of key decision-makers• Shaped by stakeholders with specific agendas• Not based on quantitative data over the long-term

• Hard to disprove due to complexity of factors

• Uses R&D spend or patents as measure of innovation• Doesn’t address the methods to execute innovation• R&D spend often distorted by tax incentives and structures• Patents is not applicable in natural resources context

• Studies not conducted in mining, limiting applicability

In a world first, our researchers have uncovered the direct relationship between innovation strategies and total shareholder return in the mining

industry.

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State of Play has engaged leaders across the globe

• Alan Bye: Vice-President, Technology, BHP

• Alex Atkins: Non-executive Director, Ausdrill

• Alister MacPherson: General Manager, Caterpillar (Westrac)

• Andrew Harding: CEO, Rio Tinto Iron Ore

• Andrew Melouney: CISO, Woodside Energy

• Andrew Michelmore CEO of MMG

• Andy Munro: General Manager, Rio Tinto Iron Ore

• Barry Fitzgerald CEO of Roy Hill

• Bill Rupp, CEO (former) JBS Beef

• Brad Parsons: CEO and Founder, MOVUS

• Brent Beregon, Vice-President, GoldCorp

• Carl Weatherell: CEO, Canada Mining Innovation Council

• Carla Boehl: Digital Operations Manager, Caterpillar (Westrac)

• Cherie Burgett, Director, MM-ISAC

• Chris Erikson: General Manager, Roy Hill

• Chris Griffth: CEO, Anglo Platinum

• Chris Salisbury: CEO, Rio Tinto Iron Ore

• Chris Sheppard: COO, AngloGold Ashanti

• Daein Cha: Managing Director, Transborders Energy

• Danielle Bull: General Manager, Caterpillar (Westrac)

• Darren Matthews, General Manager, Rio Tinto

• David Martin: Co-founder & Managing Director, Power Ledger

• Davis Cook: CEO, Research Institute for Innovation and Sustainability (RIIS)

• Debby Blakey: CEO, HESTA

• Denise Goldsworthy, Chair, MRIWA

• Diane Smith-Gander: Non-executive Director, Wesfarmers

• Diego Hernández CEO, Antofagasta PLC

• Edward (Eddie) Fry, Chairperson, Indigenous Land Corporation

• Erica Smyth: Chair (former), Toro Energy

• Frank Tudor: CEO, Horizon Power

• Gary Goldberg CEO, Newmont Mining

• Glenn Kellow CEO, Peabody Energy

• Graeme Hunt: Chairman, AGL

• Graeme Speak, Founder & CEO, BankVault

• Graham Kerr: CEO, South32

• Iván Arriagada: CEO, Antofagasta PLC

• Jack Sato: Chairman, Transborders Energy

• James McClements: Managing Partner, Resource Capital Funds

• Jason Waters: CEO, Synergy

• Jimmy Wilson: CEO, CBH Group

• Johan Coetzee: Director, South32

• John de Vries: CEO, Blackrock Mining

• John Voeller: CTO (former), Black & Veatch

• Jon Bell, CEO, Greenfields Exploration

• Kirby Johnson: Global Partner, Cognizant

• Luiz Mello, Executive Manager, Vale

• Mark Woffenden: CEO, MRIWA

• Mark Stickells, Executive Director, Pawsey Supercomputer

• Matt Taylor: CEO, Western Rock Lobster Council

• Michelle Ash: Chief Innovation Officer (former), Barrick Gold

• Mike Lomman: General Manager, Roy Hill

• Mike Neal: Co-founder and CEO, DecisionNext

• Neal Froneman: CEO, Sibanye Gold Limited

• Partha S. Bhattacharyya, Chairman and MD (former), Coal India Limited

• Philip Davies: CEO, Infrastructure Australia

• Prakash Thangamuthu: Managing Director, Thriveni Earth Movers

• Rebbecca Kerr: General Manager, Roy Hill

• Rick Howes: President and CEO, Dundee Precious Metals

• Robert Gray: Chief Commodities Strategist, Resource Capital Funds

• Robert Hough, Deputy Director, CSIRO

• Robert Rodriguez: CEO, Sinet

• Sandeep Biswas: CEO and MD, Newcrest Mining Limited

• Sean Boyd: CEO, Agnico Eagle

• Sietse van der Woude: Chairman, South African Institute of Mining and Metallurgy

• Sharon Warburton: Non-executive Director, Fortescue Metals Group

• Srinivasan Venkatakrishnan: CEO, AngloGold Ashanti

• Stephen McIntosh: Group Executive, Rio Tinto

• Strini Mudaly, CIO, Gold Fields

• Stuart Tonkin: CEO, Northern Star

• Sudip Chaudhuri, Global Practice Head for Mining, WiPro Limited

• Sue Murphy: CEO, Water Corporation

• Tamryn Barker: CEO, CORE

• Terence Goodlace: CEO (former), Impala Platinum

• Thomas Leen: Vice-President, BHP

• Tom Albanese: CEO, Vedanta Resources

• Tom Butler: CEO, International Council on Mining and Metals (ICMM)

• Tom Goerke, Director, CISCO

• Tracey Slatter: Managing Director, Barwon Water

• Vanessa Guthrie: CEO, Minerals Council of Australia

• Vinay Prakash: CEO, Adani Enterprises

• Zane Prickett: Director, Unearthed

NOTE: Titles correct as of interview date; Not exclusive

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State of Play has been supported by a network of global relationships

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1. ABOUT STATE OF PLAY

2. DATA PACK

Overview

10


10

13

14

20

23

29

31

39

57

65

0 10 20 30 40 50 60 70

Globalisation

Ageing population

Geopolitical tensions

Asian (inc. India) economic development

Role of government and regulation

Renewable energy transition

Technically aware generation entering the workforce

Transparency and social expectations

Environmental pressures

Technological change and disruption

Global Trends

We asked: Which of the following global trends will have the biggest impact on innovation in mining over the next 15 years?By % of respondents given three options

Sources: State of Play

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5

10

11

12

20

20

33

51

67

73

0 10 20 30 40 50 60 70 80

Biotechnology

Computing power

Advanced materials

Manufacturing technologies

Communications technology

Virtualisation and augmented reality

Energy technologies

Sensing and data

Artificial intelligence and analytics

Robotics and automation

Technology Areas


We asked: Which underlying technology areas will have the biggest impact on innovation in mining over the next 15 years?By % of respondents given three options

12


11

19

26

29

30

30

32

40

40

45

0 5 10 15 20 25 30 35 40 45 50

Health and safety

Country risk

Deeper ore bodies

Attracting people into the industry

Mining specific technologies

Energy costs

Community expectations

Ore body grades

Commodity prices

Environmental concerns

Industry Trends


We asked: Which of the following industry trends will have the biggest impact on innovation in mining over the next 15 years?By % of respondents given three options

13


3

13

14

25

32

37

37

39

0 5 10 15 20 25 30 35 40 45

Mining piloting site

Technology roadmap

Venture capital and start-ups

Skil ls

Research

Collaboration

Tax policy

Regulation

Government and industry bodies

We asked: Where can government best intervene to support innovation in mining?By % of respondents given two options


14


19

20

21

22

22

33

36

39

42

47

0 5 10 15 20 25 30 35 40 45 50

Processing

Exploration

Customers

Extraction

Supply chain

Energy

Community

Business models

Data

People

Potential Disruption


We asked: Where is disruption in the mining industry most likely to come from?By % of respondents given three options

15


Mining perception

10

13

16

17

17

26

32

34

54

79

Influence with government

Poor industry representatives

Economic distortions

High profile accidents

Not seen as technologically advanced

Association with fossil fuels industry

Extractive and unsustainable

Community impact

Poor understanding/communication of mining benefits

Environmental impact

0 10 20 30 40 50 60 70 80 90


We asked: Why is mining perceived negatively in society?By % of respondents given three options

16


4

11

18

21

23

29

30

43

50

70

0 10 20 30 40 50 60 70 80

Governments

Explorers

Contract mining companies

Engineering and construction

Small mining companies

Large services companies

Other industries

Research institutions

Small services companies (incl. start-ups)

Large mining companies

Who is impacting innovation


We asked: Who is driving innovation in the mining industry the most?By % of respondents given three options

17


14

14

19

22

24

34

35

40

44

55

0 10 20 30 40 50 60

Community

Customers

Energy

Supply chain

Exploration

People

Business models

Processing

Extraction

Data

Value chain


We asked: Where in the value chain are your innovation efforts primarily focused today?By % of respondents given three options

18


9

20

22

24

25

25

25

44

48

58

0 10 20 30 40 50 60 70

Community support

Capital costs

Brand

Project viability

Throughput

Market revenue

People

Risk reduction

New opportunities

Operating costs

Value source


We asked: What are your company’s main sources of value from innovation?By % of respondents given three options

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12

17

22

24

27

28

29

31

44

66

0 10 20 30 40 50 60 70

Ore body

Asset design

Market (pricing)

Operations

Asset development

Acquisitions

Country (geography)

Exploration

Partnering

Technology

Acceptable risk


We asked: As a mining business, where would you accept risk in order to increase financial returns?By % of respondents given three options

20


Transparency as a driver of value

We asked: Will transparency of the source of raw materials become a significant driver of value for mining companies?By % of respondents

58

27

15

0

10

20

30

40

50

60

70

Yes Unsure No


21


Cyber security

We asked: Does your company place sufficient emphasis on cyber security?By % of respondents

63

25

12

0

10

20

30

40

50

60

70

Yes No Unsure


22


Cyber security risk

3

10

14

20

25

30

43

56

0 10 20 30 40 50 60

Environmental damage

Product delivery

Human safety

Loss of equipment control

Financial loss

Brand sabotage- Damage to brand reputation

Loss of view (data going dark or corrupted)

Theft of data


We asked: What is the biggest risk from cyber security for your business?By % of respondents given two options

23


Importance of innovation

We asked: How important is innovation to the success of your long-term business strategy?By % of respondents

62

35

3

0

10

20

30

40

50

60

70

Critical Important Not important


24


Innovation timeframe

We asked: What is the key time frame for innovation focus in your company?By % of respondents

15

43

29

9

4

0

5

10

15

20

25

30

35

40

45

This year 1 to 3 years 3 to 5 years 5 to 10 years 10+ years


25


Innovation spend

We asked: Do you think your company spends enough on innovation? By % of respondents

51

47

3

0

10

20

30

40

50

60

Not enough Enough Too much


26


Change in innovation spend

We asked: How do you expect spending on innovation to change next year?By % of respondents

6

47 46

0

5

10

15

20

25

30

35

40

45

50

Decrease Stay the same Increase


27


Approach

We asked: Which phrase best represents your company’s approach to technology based innovation?By % of respondents

16

30 30

24

0

5

10

15

20

25

30

35

Lead across industries Lead in industry Fast follower Conservative follower


28


Technology focus areas

5

12

21

21

22

25

35

48

49

62

Biotechnology

Advanced materials

Manufacturing technologies

Computing power

Virtualisation and augmented reality

Energy technologies

Communications technology

Robotics and automation

Artificial intelligence and analytics

Sensing and data

0 10 20 30 40 50 60 70


We asked: Which underlying technology areas receive the most innovation focus in your company?By % of respondents given three options

29


Digital technology

11

12

26

28

31

37

44

45

66

Augmented reality

Blockchain

Mobile

Cloud

Robotics

Autonomous vehicles

Internet of things

Artificial intelligence

Big data analytics

0 10 20 30 40 50 60 70


We asked: Which of the following digital technologies will have the biggest impact on your company over the next 5 years?By % of respondents given three options

30


Business value of digital technologies

18

24

29

33

38

45

46

67

Enhancing product attributes

Improve customer satisfication

Increase responsiveness to the market

Improve product quali ty

New growth from new products & services

Increase revenue from existing products & services

Reduce safety risks and related cost

Reduce cost

0 10 20 30 40 50 60 70 80


We asked: How could digital technologies create business value for your company over the next 5 years?By % of respondents given three options

31


Barriers to digital innovations

10

14

18

31

33

35

37

38

40

43

Government regulations

Cyber security & privacy concerns

Lack of top management commitment

Lack of technological infrastructure

Lack of technical resources

Unclear business model and strategic vision

Lack of digital skills

Organisational culture

Lack of financial resources

Lack of experience with digital innovation

0 5 10 15 20 25 30 35 40 45

We asked: Which barriers are most important for implementing digital innovations in your company?By % of respondents given three options


32


Energy sources

4

6

11

15

23

25

37

44

62

72

Geothermal

Nuclear

Hydrogen

Other (e.g. biofuels)

Hydro power

Wind

Coal

Oil & diesel

Gas

Solar

0 10 20 30 40 50 60 70 80

We asked: What energy sources will become the most widely used in your country’s mining companies over the next 15 years?By % of respondents given three options


33


Renewable energy technologies

We asked: Will renewable energy technologies significantly change mining operations in your country over the next 15 years?By % of respondents

61

24

15

0

10

20

30

40

50

60

70

Yes No Unsure


34


3

4

11

26

28

28

44

56

0 10 20 30 40 50 60

Venture fund

Spin-offs (separate business)

Acquisition

R&D group

Culture

Internal special projects - 'skunk works'

Partnering & collaboration

Continuous improvement

Structures

We asked: What structures does your business use to innovate?By % of respondents given two options


35


Approach

9

26

27

39

Bottom up: Culture and incentives

Random: No clear approach

Top down: Targeted strategy and systems

Both: Top down and bottom up

0 5 10 15 20 25 30 35 40 45

We asked: How would you characterise your company’s approach to innovation?By % of respondents


36


Driver of innovation

3

4

4

5

6

7

11

14

22

26

Head of strategy

Junior staff

Other (please state)

Board

Frontline leaders (e.g. Supervisor)

Head of operations

Business unit heads

Head of technology

Chief executive officer

All – it is core to our culture

0 5 10 15 20 25 30

We asked: Who is the biggest driving force for innovation in your company? By % of respondents


37


Improving innovation

14

19

20

20

27

28

39

41

43

48

Board leadership

Decentralise accountabi lity

Diversity

CEO leadership

Partnerships

Incentives and metrics

Link to strategy

Innovation processes

Culture

Vision and roadmap

0 10 20 30 40 50 60

We asked: How could you best improve innovation in your company?By % of respondents given three options


38


Incentive to innovate

12

12

14

20

23

24

38

58

Competition

Money

Career promotions

Goals

We don't

Autonomy

Leadership

Culture (incl. success stories)

0 10 20 30 40 50 60 70

We asked: How do you incentivise your workforce to innovate?By % of respondents given two options


39


Partnering

6

7

10

19

23

36

38

62

Acquisition

Venture capital

Single partner

Open innovation

Customer

Research centre

In-house

Selected partners

0 10 20 30 40 50 60 70

We asked: When aiming for a breakthrough innovation, what partnering approaches would you use?By % of respondents given two options


40


Perception of risk

2

16

19

25

25

27

37

41

45

63

They're not

Ore body variability

Investors

Piloting difficulty

Compliance

Revenue interruption

Market uncertainty

Payback periods

High capital

Industry culture

0 10 20 30 40 50 60 70

We asked: Perceptions of risk can be an impediment to innovation in mining – What do you believe is the primary reason for this?By % of respondents given three options


41


Corruption

We asked: How often do you encounter corruption in your job?By % of respondents

1

5

20

43

31

0

5

10

15

20

25

30

35

40

45

Always Often Sometimes Rarely Never


42


Innovation performance

30

62

7

0

10

20

30

40

50

60

70

Below expectations Meeting expectations Exceeding expectations


We asked: How are your innovation programs performing?By % of respondents

43


Innovation success

We asked: How successful have introductions of new innovations been into your business?By % of respondents

1

27

61

10

0

10

20

30

40

50

60

70

Generally a failure Not very successful Successful Highly successful


44


Implementation failure

16

20

21

23

26

32

34

34

39

56

Team composition

Skil ls

Unforeseen impacts

Impatience

Budget

Leadership

Complexity

Technology readiness

Resistance

Competing priorities

0 10 20 30 40 50 60

We asked: When implementation programmes of new innovations fail, what is generally the reason?By % of respondents given three options


45


Team structure

7

29

31

33

Allocate to existing implementation group (eg. PMO, BI)

Feed through existing hierarchy

Form dedicated cross functional team

Customise approach for circumstances

0 5 10 15 20 25 30 35

We asked: What team structure do you use for implementing new innovations?By % of respondents


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S U P P O R T E D B Y

W W W . S T A T E O F P L A Y . O R G

Graeme [email protected]

Paul [email protected]

Xavier [email protected]

Madi Ratcliffe Stephanie Munro

C O P Y R I G H T © 2 0 1 9 – A L L R I G H T S R E S E R V E D V C I P T Y LT D

Kevin Ong

AUTHORS

CONTRIBUTORS

Peter Nicholls Vania Aranibar Helena Trang

2019 survey data pack€¦ · • alister macpherson: general manager, caterpillar (westrac) •...

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