arturo herrera

8/23/2019 Arturo Herrera

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Opportunities for High-impact Innovationin Mining

PROCEMIN 2011

1

Santiago, November 2011

Arturo Herrera [email protected]

www.innspiralmoves.com


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Kings of leveling downwards

2

Por qu NO sucede estoen Chile?


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Create and capture value using knowledge

Innovation is creating relevant and unique value

Innovation

3

applied to solve unmet needs

Research

Innovation = transform knowledge into moneyResearch = transform money into knowledge

Rafflers Circle


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The initial source of innovations is to find the maximum profitabilityof the installed capacity

High

UseofIns

talled

Capacity

Enterprise 1

Enterprise 3

SubstantialInnovation

Innovadora S.A.

IncrementalInnovation

4INNSPIRAL Pro uesta Tcnica

Managment CapacityLow High

Low

Both innovations may occur simultaneously and also in a complementary manner,so an integral management is required

Source: Innspiral Moves


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There are two innovation clusters in the mining industry and basedon them we can create strategic focus to look for new business

What is it? Why is it important?

Cluster based oncapacities

Cluster focused on operationaldecisions; it allows the company toidentify profit opportunities in its owncapacities, whether they are related to

their partners or not

The cluster identifies new businessopportunities designed to capitalize

on ones capacities and theirpartners

5

Cluster based onmarket trends

Cluster focused oncorporate decisions; it allows the

company to find innovation among the

market trends and its own needs

The cluster identifies new businessopportunities to solve the major

issues in the mining industry



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An installed capacity which is not in use, allows improvements

and optimisations without significant investment

Maximising theinstalled capacity

The technology considered in the design of projects is alreadyChanging of obsoletetechnologies

The first innovation cluster enables the company to developdifferent business opportunities with its own capacities

6

There are professionals who have acquired significant knowledge

ofinternationally developed technologies and methods that

often do not have the opportunity to apply them in Chile

Profiting from internalknowledge



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People Resources Business Growth

It is possible to group trends in four main focuses

Conceptual Map

Disinterest for the miningindustry

Aging workforce Cyber activism Relationship with

Communities

Inclusive Business Negotiation with trade unions Outsourcing Augmented Reality Womens World

Diversity in Talent Mining Security

Sustainability is everyonesresponsibility

Increasing water consumption Hydro-Efficiency Increasing Energy Demand Increasing Regulations Greenhouse Gases (GHG)

Decreasing Costs Investment in Mining Mining Oriented Financial

Market

Mergers, acquisitions, and

expansion

Emerging Economies Crowd Sourcing Innovation Avalanche Sulfuric Acid Market

New Technologies andAutomation

Co creation Copper Sustainability New Markets for Copper Chindia New ITs


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Disinterest for the Mining Industry

In spite of being the main driver of our economy, a great part of the population seesthe mining industry as unattractive, which generates a future shorthanded problem

Workers and professionals lack theknowledge, skills and abilitiesrequired for this industry.

Knowledge In 2007 only 2,713 wereenrolled, representing 0.37%of all students that year.

13% of professionals

in low income countries fulfill thenecessary conditions to performsuccessfully in their roles.

Only 0.93%...of the labor force in Chile wasemployed in the mining industryduring 2009.

In 2010, 4,225 wereenrolled, yet this is still

merely 1% of all students

that year.

Mining Engineering, Metalurgy andGeology Majors


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New Technologies and Automation

Innovation is the key to increase competitiveness and productivity in the industrythrough the use of new technologies

Mining companies throughout the world areincreasingly adopting new technologicalsolutions and all that information can be foundin the MINING.com Magazine.

MINING.com

Arouses InterestAccording to Microsoft, Chilean miningcompanies are more interested inapplying new technologies such as co-

working and Cloud Computing.

AndinaAutomation system in subterranean mineallows to remotely control the tasks of(un)loading and transporting materials.

ABB was awarded US$

50 millions for the

Automation and the

Electric Systemimplementation of the

Toromocho Mining

Project.


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Co-CreationGenerating new business models with the companys network brings a sustainabletwo digit growth

Community Alliance intends to include newpartners, give interesting talks, sportworkshops and support for young soccer withthe project For a better life quality in the LoaProvince

Cobreloa-Mining Co. El Abra

Providers andAllied

Channels

Value Network Diagram

IT Mining StandardSOMI, the model that also integrates FreeportMcMoRan, seeks adherence of big miningcompanies and intends to set an IT standard

for the mining industry.

Metso MineralsA Finish manufacturer of mining equipmentthat negotiates with mining companies to signagreements or strategic alliances that helpimprove the efficiency of their operations.

Complementary Allies

CompetitorsOpen

KnowledgeNetworks

Clients


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1111

Like in Horse Riding, to win a race of double digit growth, having

pure blood horses (projects) is not enough; the riders must also be

winners (entrepreneurs), and the trackmust be appropriate

(corporate environment)


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Innspiral designed, implemented and operated the InnovationSystem in the mining industry

Mainly activities realized:

Definition of the innovation clusterwith its strategic focuses

Design and implementation of the

innovation system

Creation of the InnovationCommittee and the InnovationDepartment

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Design an imp ementation o t etechnological alert system

Results

Innovation System operatingsuccessfully and projects portfolioin execution


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The innovation system starts from the overlap with corporatestrategy until the generation of results.

The Innovation System

Innovation System

Corporate Strategy

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Results


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The innovation system is structured from the strategic towards theoperative, reinforced by supportive processes and facilitators

Innovation System

Corporate Strategy

Results

Project ManagementIII Facilitators

InnovationPortafolio

Management

IntraentrepreneursManagement

Strategic Level

Roles, Goalsand Innovation

Focuses

I

Organization

ResourcesO erative Level

14

IV Support

KnowledgeManagement

Positioning andDiffusion

ManagementControl

Corporate Strategy defines the decision criteria and strategy for the innovation system.At the same time, the results of the system are useful inputs for re-orienting the strategy

Fuente: Metodologa Innspiral

NetworksInnovation

Alerts


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And the portfolio management is the pivot between strategic andoperative aspects, facilitators and supportive processes

Innovation System

Corporate Strategy

Results

Project Management

III Facilitators

Intraentrepreneurs

Strategic Level


Focuses

Organization


Management

I

15

IV Support

Management

KnowledgeManagement


ManagementControl

II Operative Level

Corporate Strategy defines the decision criteria and strategy for the innovation system. At thesame time, the results of the system are useful inputs for re-orienting the strategy.


NetworksInnovation

Alerts


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The innovation system is structured from the strategic towards theoperative, reinforced by supportive processes and facilitators

Innovation System

Corporate Strategy

III FacilitatorsStrategic LevelI

Organization

Project ManagementRoles, Goals

and InnovationFocuses


Management

16

Results

IV Support

Intraentrepreneurs

Management

KnowledgeManagement


ManagementControl

ResourcesOperative Level

NetworksInnovation

Alerts

II



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Focuses are specific challenges from which organizations cangenerate new business opportunities

Trends

Solutions

Needs

Problems

Innovation Cluster II

Explicit Latent

Direct Indirect

Corporate Strategy

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InnovationFocuses

Innovation Cluster I

Companys Networks

Abilities Assets

Companys capacities Opportunities


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Characteristics:

1. Question2. Simple3. Brief

4. High Remembrance5. Evident Answers6. VERY aligned with strategy


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Project Management materializes the value of innovation for thecorporation

Innovation System

Corporate Strategy

III FacilitatorsStrategic Level


Focuses

I

OrganizationInnovationPortafolio

Management

Project Management

19

Results

IV Support

Intraentrepreneurs

Management

KnowledgeManagement


ManagementControl

ResourcesOperative Level

NetworksInnovation

Alerts

II



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While the innovation process advances, the exploration ofopportunities evolves from the interior to the exterior of thecorporation

Levels and Methods of exploring new business opportunities

Knowledge and InternalCreativity Co-creation and Copy External Knowledge

Technology Alert

Exploring new technologies thatcould leverage new businesses for

Co-creation workshopsBrainstorming

Generating business ideas from theconnection between problems and

Joint exploration opportunitywith providers and companies

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the company (Patents, Academic

R&D, Industrial and TechnologicalFairs).

Copy

Exploring products, services,and technologies that aretested or sold by similarcompanies in other markets orcountries.

Open Innovation

Inviting entrepreneurs andacademics whose businesses ordevelopments are related with theinnovation focuses of the company.

Historical Projects

Restarting old projects that werestopped for diverse reasons (lack offocus, contingency issues, etc.).

needs of clients, the trends that affect

the market, and the capacities of thecompany.

that present complementary

capacities.



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The different actors of the development and sales chain for newtechnologies will be identified

Actors in each kind of technological innovation

Applied R&D Start-upsConsolidatedCompanies

I II III

Business Incubator

R&D Centers

Technology transference and patenting

1

2

3

21

Risk Capital Funds

Innovation Promoting Entities

Industrial Associations

5

6

4

Angel Investors7



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The ideas are evaluated by the workshop participants, analyzingthose with the highest potential

Ideas that require development

for their implementation. The potential impact is high.

Ideas that require littledevelopment for therimplementation.

The potential impact can be low.

Ideas that requiredevelopment for their

Ideas Classification (conceptual)

Impact

2

3

4

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mp emen a on. The potential impact is low.

Potential Quick Wins Reject or Freeze

Goes into design andevaluation process.

22


Ease ofImplementation

0

1

1 2 3 4


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The entrepreneurial capacity is the key for the success of projects,therefore this function is specially relevant

Innovation System

Corporate Strategy

III FacilitatorsStrategic Level


Focuses

I

OrganizationInnovationPortafolio

Management

Project Management

23

esu s

IV Support

KnowledgeManagement


ManagementControl

Resources

Operative Level

NetworksInnovation

Alerts

n raen repreneursManagement

II



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Recruitment and SelectionProcess

Choosing the most suitable people inside or around theorganization to develop new business or innovation projects.

Evaluation ProcessEvaluating the performance of the intraentrepreneur in asystematic and formal manner during the development of his

project (design and evaluation, execution and growth).

Formation and DevelopmentProcess

Providing and incorporating learning related to innovation,intraentrepreneurship, project and personal capacitydevelopment for each intraentrepreneur.

1

2

3

The Intraentrepreneurs management must respond to 5 specificobjectives to find and enchance extraordinary talents

Specific ObjectivesComponent

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Support Circle

both the development of the intraentrepreneur and of hisproject.

Incentives ProgramDefining incentives (pecuniary/ non pecuniary) to motivatepotential intraentrepreneurs and align them with the objectivesof the company.

4

5

When counting on extraordinary intraentrepreneurs we cando the projects withthe right people and therefore increase their chance of success.



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It is fundamental to define the structure of actors that assume differentfunctions and responsibilities in the portfolio management

Innovation System

Corporate Strategy

FacilitatorsStrategic Level


Focuses

I


Management

Project Management

III

Organization

25

Results

IV Support

KnowledgeManagement


ManagementControl

Operative Level


NetworksInnovation

Alerts

Intraentrepreneurs

ManagementIIResources



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It is expected that the intraentrepeneur is continuously supportedby 4 different groups

1. Innovation Committee

4. Sponsor

2.InnovationManage-

ment Team

CentralActors

CEO and First LineManagers

Make decisions regarding allactivities in the system

Innovation supervisors atthe company

Support both the formationstage and the execution ofthe project

A first line executive for the

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3. Intraentrepreneur

5. Other Areas

Company executives thatdedicate part of their timeto developing the project.

Lead the execution of

innovation projects

n raen repreneur

Lend political support andenhance the technical/strategicdevelopment of the project

Different areas of the company dedicatedto supportive activities

Reinforce the supportive activities (Human Resources,Communications, and Studies) as a counterpartSource: Innspiral Moves

f d l d f h f h d ff


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It is fundamental to define the structure of actors that assume differentfunctions and responsibilities in the portfolio management

Innovation System

Corporate Strategy

FacilitatorsStrategic Level


I


Project Management

III

Organization

27

Results

Support

Operative Level


Intraentrepreneurs

ManagementII Resources

IV

KnowledgeManagement

ManagementControl


NetworksInnovation

Alerts


h l k l d


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The supportive processes contemplate knowledge management,innovation alerts, networks, and management and diffusioncontrol

Managing in an integral form the differentcomponents of the Innovation System to assurethe expected results (Portfolio management,project management, etc).

Components in an Innovation System.

IV Support

Feeding the process and developing projects fromknowledge and existent innovations in the market(national and international) in the framework ofinnovation focuses and projects, in both a proactive andreactive manner.

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Capturing and making availablethe knowledge generated fromoperating the innovationsystem, the development ofprojects and the companysnetwork.

KnowledgeManagement Positioning andDiffusionInnovationAlerts Networks ManagementControl

Positioning the company as leader ininnovation.

Positioning innovation inside thecompany.

Encouraging participation andmotivation of people to contributetowards forming an innovationculture.

Encouraging, developing and

managing an open network forinnovation (internal and external)that integrates collaboration ofpeople, organizations, andcompanies.


I i i bl bli i


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2. Alignment of the company strategy with innovation goals

3. Creation of the necessary culture to facilitate the development ofinnovation projects and their entrepreneurs

4. Increased chances of success due to a rigid control and

1. Constant source of value creation for the company

Innovation is a manageable process, enabling companies toachieve at least seven benefits

Innovation as amana eable

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7. Systematization of high impact results on EBITDA

5. Reduced uncertainty associated with a portfolio of innovationprojects

6. Systematic development of intrapreneurs to lead innovationprojects in an effectively way

process



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We will innovate.

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en we e us ness o e o e

company in which we are, with our own business

model = Life Project

(Great Dreams)


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Opportunities for High-impact Innovationin Mining

PROCEMIN 2011

31

Santiago, November 2011

Arturo Herrera [email protected]

www.innspiralmoves.com

arturo herrera

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