Embedding innovation @ Exxaro Marinus du Plessis Group Manager: Assurance and Innovation
Responding to a directive from CEO Exxaro will be required to enhance its internal innovation and project execution capabilities in the coming years in order to meet shareholder expectations 2 -Sipho Nkosi - 2012 For his visionary leadership & Innovation Sipho was awarded the: 2012 Growth, Innovation and Leadership (GIL) Award by Frost & Sullivan.
Exxaro s vision 3 3
The case for innovation 4
What is innovation? 5 "Innovation is the development and implementation of new ideas through solutions which add value in a sustainable way". 5
What is value innovation? 6 Conventional Value innovation Industry assumptions Strategic focus Customers Assets and capabilities Product and Service offerings Industry conditions are given The aim is to beat the competition Retain customer base via differentiation and segmentation Leverage existing assets and capabilities Work within traditional industry boundaries Industry conditions can be shaped The aim is to make competition irrelevant Focus on key value in use commonalities which customers value Not constrained by what it already has. How could we renew or create Think of total solution even if its beyond boundaries
The Exxaro innovation model 7 Culture Process & Tools Leadership Capability Infrastructure
Leadership 8 8 Visionary Risk taking Stretch targets Change Management Radical thinking Believe and demonstrate innovation Strategic alignment Sustainability/ long term approach Value innovation DNA Exxaro s (In)credible Leadership Model
Culture 9 Everyone has desire to innovate Collaboration and sharing of knowledge Networking also external Encourage, recognise, support innovative behaviour Openness to new ideas Allow failure and questioning What is a culture of innovation? A culture of innovation has less to do specifically with new products, new processes, or new ideas. It is more than new ideas, it is a collective capability throughout an organisation to repeatably, predictably and sustainably identify the right challenges (big or small), find appropriate solutions and implement the best solutions to the challenges. Adopted from Stephen Shapiro: 24/7 Innovation Top Four Gap Areas 1. Cross-Silo Collaboration 2. Target Setting 3. IP Sharing 4. Goal Communication 9 Top Three Opportunity Areas 1. Cross-Silo Collaboration 2. Learning Organization 3. Leadership Commitment Not Selected (Reasoning) 1. Target Setting as discussed the communication is the biggest barrier i.e. cascading and creating understanding of how targets translate into individual goals. Hence Goal Communication was selected. 2. IP Sharing this is part of the bigger issue of cross-silo collaboration, and as a result this gap will be closed if we pursue Cross-Silo Collaboration (the biggest priority). 3. Leadership Commitment this is something that is already rated as one of the top in terms of Effectiveness and is not a big gap area. Top Three Areas for Improvement (improvement recommendations on next page) 1. Cross-Silo Collaboration 2. Learning Organization 3. Goal Communication
Capability 10 Creative people Supportive management style Cross functional teams Innovation skills (DNA) Continuous learning Innovation funding Well functioning networks Knowledge Management Nurture and manage innovative talent 10 SABA e-learning module Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R & D. It s not about money. It s about the people you have, how you re led, and how much you get it. ~ Steve Jobs
Infrastructure 11 11 IT innovation system Idea management system Innovation portal Organisational structure
60 50 40 30 20 10 0-10 Processes and tools 12 Systematic innovation management process Idea management process Portfolio management/ewpm Technology development process Innovation tools Benefits tracking Performance management Benchmarking Open innovation & collaboration Phase 1 Phase 2 Phase 3 Generate Idea & Define Initiative Evaluate & Validate Initiative Portfolio Management Develop & Demonstrate Solution Design Optimise Demonstrate Phase 4 Industrialise Impl eme nt Proje ct Initiat e Projec End-to-End Process of Technology Project Planning & Execution t Deve lop Proje ct 12 Phase 5 Track Benefits EXXARO STRATEGY
Exxaro innovation programme benchmarked 13 Frost & Sullivan recognizes Exxaro Resources Ltd (Exxaro) with the 2013 Africa Frost & Sullivan Award for Visionary Innovation
Exxaro s NEXT journey 14 14 INDUSTRY RESEARCH STREAM 1 World in 2030 Global DRIVERS STREAM 2 Resource Industry 2030 Industry DRIVERS STREAM 3 Exxaro NEXT Programme 2030 Exxaro STRATEGIC THRUSTS ` Benchmarking Visits And Conferences Scouting Update Technology Thrusts And Roadmaps Develop Value Propositions, Priorotise Execute R&d Projects
Exxaro s vision of the future 15 15
Roadmap to the future 16 16 2013 1. Increasing Shareholder expectations (Profits) 2. Extreme escalation in operating costs 3. Rapid Technological Innovation i.e. IT/Com s.. 4. Increased pressure on Social and Regulatory Compliance. 5. Un-balanced relationship between government, community and mining. 6. Current core processes are sub-optimized (exploration, geology, mining processing and logistics) 7. High levels of waste and discard materials from production. 8. High Impact on Environment and insufficient Rehabilitation 9. Fossil Fuel based Economy / Carbon Emissions 10. Energy Supply / Cost constraints 11. Limited focus on downstream beneficiation 12. Current workforce ill-equipped for the future (High levels of semi-skilled employees and shortage of highly skilled employees) 13. Communities dependant on Mining Activities 10 Strategic Thrusts Smart Exploration New Mining Technologies New Processing Technologies Asset Management/Logistics Clean Coal Technologies Innovation to Zero Harm Social Responsibility Sustainable Energy Automation Integrate/Redefine Value Chain 2030 1. Sustainable License to Operate (LTO): Creating inclusive wealth-all Stakeholders Balanced and sustainable partnership between government, community and resources industry Small footprint / limited environmental impact Self-sustaining economically viable community > Beyond a Life of Mine (LOM) 2. Smart Exploration: Accurate, predictable, instant, information and models 3. 100% resource extraction 4. Zero Waste 5. Zero Harm - safety/health 6. Energy, carbon and water neutral 7. Workforce equipped to support the 2030 business 8. Hybrid/renewable/alternative energy solutions 9. Capitalise on trend of advanced / light Materials /Metals 10.Integrated, optimised and redefined value chain
Exxaro successes...pioneering and migrating... 17 Cennergi (Cleaner Energy Company) Co-generation technology/sustainable energy AlloyStream TM Value in Use In-pit crushing UHDMS Dry Beneficiation Energy efficiency Containerised bulk handling On line analysis Semi coke and sintel char on site...
Summary 18 18 Innovation is needed to be competitive and sustainable It must from part of the DNA of an organisation Needs to be driven from the top Innovation don t just happen a systematic approach and active management is needed Our NEXT programme manages technology development to be aligned to strategy It has a long term view It manages the programme on project management level The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man. -George Bernard Shaw