As adoption costs fall and off-the-shelf technology solutions become easier to retrofit, digital transformation continues to reshape the way that mining and energy organisations operate. This transformation can be seen in the deployment of autonomous and remotely operated equipment for hazardous tasks, the use of AI-enabled predictive maintenance to reduce downtime, and increasingly efficient data-driven exploration using real-time analytics and machine learning.
Where much of the Industry 4.0 discussion is focused on technology-enabled change in these sectors, an equally significant transformation is happening around people and culture.
“The main barrier to digital transformation is no longer cost and availability,” explains Paul Howard, Gerard Daniels’ Global Sector Leader Mining. “It’s having the right people, culture, leadership capability, workforce readiness and strategy to deploy technology and manage the change that it brings.”
“While digital literacy remains important, it’s critical for today’s senior leaders to understand how technology shapes the way people work and how decisions are made,” Paul continues. “They must also have the skills and experience to support organisation-wide change.”
Here we consider the future leadership requirements in mining and energy and why people, not technology alone, will determine the organisations that succeed and those that will be left behind.
Delivering digital and cultural transformation
Technology can transform processes very quickly, but organisational culture is much slower and far more complex to evolve. “When established organisations introduce technologies designed to automate processes or connect a broad number of operating systems, it can challenge longstanding ways of working. This change can also create a sense of uncertainty within the workforce, particularly for employees who perceive technology as a threat to their role,” says Paul.
“As organisations move through digital transformation, employers must consider the human dynamic and create an environment that brings people along on this journey,” Paul continues. “Strategy and leadership capability are critical factors in achieving this, as change requires an understanding of both the people opportunity and the culture that’s needed to support it.”
The introduction of autonomous haulage and drilling processes provides a good example, as these technologies change the nature of related roles but also create opportunities to reskill (or upskill) people into different, often higher-value areas of work. A recent ABB white paper (Mining 4.0: How do we get there in Australia?) describes how automation has shaped the approach to planning the Caravel Copper Project in WA – operations that will increasingly rely on automation and be supported by a workforce that embraces technology and change from the beginning.
“We’re talking about autonomous haulage, autonomous drilling and automation at the plant,” explains then Mining Manager, Jason Vos. “When data processing is automated it redefines the type of roles required at a site. Rather than manual skillsets, we’d be looking at people who can manage and intervene effectively in crisis situations by making quick, sound decisions based on the information and knowledge they have.” (Source).
“Harnessing the opportunities that digital transformation brings requires leaders who understand what technology will change, who can explain why it matters, and demonstrate the value it allows people, not just technology, to create,” says Paul.
When technology changes, the talent equation changes too
Digital transformation will continue to drive demand for highly experienced and technically skilled senior leaders. Moving through Industry 4.0 into Industry 5.0 also requires leaders with the breadth of experience to understand different humanistic perspectives, challenge established assumptions and help both boards and Executive Leadership teams navigate change and uncertainty – all without losing sight of the commercial goal and the people dynamic that will ultimately shape it.
For many organisations, the move into full adoption of Industry 4.0 raises an important question: do current leaders and succession pipelines reflect the organisation today, or the direction in which it is heading? As the capability requirement evolves, Paul believes there may be an opportunity to broaden the talent pool.
“As operations become increasingly connected, mining and energy organisations will need leaders who understand the value of technology and the capability that complements it. These individuals must be capable of translating this knowledge into organisational strategy, workforce design and capability, recruitment strategies and succession planning,” he says.
While traditional industry skills and experience will remain critical at all levels, they must be complemented by digital literacy, data-driven decision-making and an appetite for change. Some of these capabilities may already exist, but addressing talent gaps in a market that’s already quite tight will require business leaders to look beyond traditional industry backgrounds and consider how transferable skills and experience can be seamlessly incorporated.
“Recruiting from outside your sector is now a very sensible option,” says Paul. “Many of our resources clients are actively recruiting from the automotive industry, for example, where organisations have often progressed further with these technology changes.”
For boards and HR Leaders, delivering on both the corporate strategy and the future leadership requirement demands a highly targeted approach to succession planning and building the talent pipeline. Ultimately, mining and energy organisations will need digitally aware leaders with the skills and attributes to lead major change in a people-centric way.
The human-machine relationship is evolving
The most productive discussion about digital transformation does not put humans up against machines – it focuses on what becomes possible when technology and human capability combine.
“Consider smart drilling, where increasingly connected drilling equipment captures geological information while drilling – data that then informs how blasting is undertaken,” says Paul. “Instead of applying a traditional approach, taking a smarter, technology-enabled approach allows blasting engineers to respond to conditions in real time, driving efficiency and often reducing the total use of explosives.”
The same principle applies at an organisational level when there are opportunities for technology to bring information together, automate repetitive tasks and support faster decision-making at the coal face. “It’s important to determine what digital transformation means in both environments – not just in terms of productivity but also for accountability, developing skills and capability, organisational structure and value creation,” says Paul.
An evolving risk landscape
The connected nature of operations and technology makes cybersecurity a growing risk and another important consideration for mining and energy sector boards. While broad interconnectivity is a highly desirable outcome, the risk of sophisticated hacking from outside the organisation also has the potential to shut operations down completely.
“Cybersecurity expertise may not exist in all senior leadership teams, so boards must think proactively about how they will access the right advice and experience when needed – either by appointing new directors with these skills or through trusted external advisers,” says Paul. “Succession planning must also factor in the diversity of risk capability that’s now required.”
Mining 4.5 – preparing for what comes next
Industry 5.0 is considered the next phase of industrial transformation, with greater emphasis on human-centricity, resilience and sustainability. But for mining and energy organisations, the transition from Industry 4.0 to Industry 5.0 is still in its early stages and unlikely to be clearly defined.
“Many organisations are still integrating the technologies associated with Industry 4.0 while confronting the human and organisational realities that define Industry 5.0. What began with technology has increasingly become about the transformation of people, organisational culture and their potential to shape future value creation in these industries,” says Paul.
“Perhaps Mining 4.5 defines the point where technology-enabled transformation and human-centred transformation converge for the resources industries,” he continues. “At this juncture there is real potential for organisations to proactively consider the opportunities that technology presents and the important role of people to ensure that opportunity is understood, implemented and translated into better operational and people outcomes.”
As the next phase of industrial transformation takes shape, the real leadership challenge is ensuring people are ready to shape it. “There is a significant opportunity for mining and energy organisations to improve productivity, safety, cost efficiency, decision-making and sustainability,” says Paul. “What’s now clear is that technology alone cannot deliver these outcomes. That’s why the organisations that successfully navigate the next phase of transformation will be those with leaders who can connect technology with strategy, capability, culture, innovation – and most importantly, with people.”
