To (Panic) Buy or Not to (Panic) Buy: The pressing need for succession planning in mining

The Covid-19 crisis has materially impacted our industry as global supply chains and people movement have in many cases all but ceased. That said, mining is a significant GDP contributor to most of the countries it operates in, and it’s evident that many governments have been taking every measure available to keep mines operational, or at least fast-track reopenings in some form or another.

In these unprecedented times of disruption and uncertainty, it might be tempting to default to ‘wait it out’ before making decisions (other than dealing with short term pressures). Many are undoubtedly also suffering from analysis-paralysis, overwhelmed by all the bewildering unknown.

However, with crisis comes opportunity, and the current crisis presents an opportunity that cuts through both these extreme reactions.

A consistent thread we’ve observed from our daily interaction with clients over the last two months is that, for the majority, their minds are relatively close to a “business as usual” state. There is also unanimous agreement that rarely has there been a better time to take stock, think and plan (even just to acknowledge the post-Covid-19 risks to businesses).

However, if Covid-19 has taught us one thing, it’s that panic buying is not a good model.

But there is one risk that needs urgently addressing: having a succession plan. Spoiler alert: it is not about Covid-19.

Stratum published a report on this topic back in 2014, called The Demographic Time Bomb in Mining. Yes, it was released six years ago. Still, it’s an ominous warning that the industry’s leadership faces a crisis if companies fail to nurture, or proactively identify, talent able to fill business-critical positions.

It’s very much the pain point for 2020 as it was in 2014 (I would strongly recommend taking a look at the above research report again).

The findings exposed the industry’s lack of preparedness, scarily a situation that hasn’t improved much since.

High-level headlines included:

Only 1% of participants thought that the industry was well prepared to face the future from a talent perspective.
A vast majority – 87% – of executives thought the industry was “completely, or at best, somewhat prepared”.
82% of participants thought that succession strategies were vital for the long-term future of their organisations – yet, only 28% of organisations had succession strategies in place.
A third – 29% – of board executives believed that the next generation of leaders would come from external candidates, and only 18% thought that succession would come from within the business.
Finally, 40% thought their companies would fill roles through open competition in the market.

There’s one statistic that leaps out: that only 28% of companies had any succession planning or talent pipeline in place, at any level.

Fast forward to now, and the riskiness of such short term thinking and failure to treat this issue as a matter of urgency is plain to see.

Encouragingly, the inspiration for writing this post came from several clients engaging Stratum in the last two months, during Covid-19, to carry out succession planning projects. Two notable projects were for a CEO and General Manager.

In each case, the client’s concern was risk mitigation while being optimally positioned to act at the right time (one mandate was planning for 24 months from now).

That second point is the crux. Considering the competitive advantage of ‘knowing where your talent will come from’ is not a knee jerk reaction to one particular crisis, it’s a way of being on guard against the unexpected, being equipped to deal with any emergency or challenge, whether internal or external.

Succession planning brings a multitude of benefits. Consider these:

It’s vital for future-proofing (or, crisis proofing) your company. Having a continued plan for who can step into the leadership role minimises the risk of the business being left vulnerable should a business-critical person unexpectedly resign, fall ill, or leave the company for whatever reason. Most mining operations would be materially affected if a COO, General Manager, Mine Manager, Process Manager or any other technical leaders suddenly leave their organisation – the role simply has to be filled. Often a company’s ability to operate a mine depends on it – so much more the reason not to reactively rush to a “fix”.
It will enhance your employer brand if employees from lower down the organisation can see a clear path for career development and progression that leads them to the top positions. It sends out a strong signal that the company is committed to nurturing homegrown talent. This will boost your reputation as an employer of choice in what is rapidly becoming a candidate-driven market.
It fosters greater engagement and loyalty. Investing in the training and development of your high flyers in readiness for a leadership role will increase their commitment to the business, potentially reducing churn, yet;
It can also allow your company to be ready, proactively, should an internal candidate not emerge as the strongest or most suited.
It allows your HR team to put in place well thought out development programmes that meet both the organisation’s and individual’s needs, and crucially, hone skills and behaviours that fit in with your unique business strategy.
It solidifies company culture. Knowing what you want, and planning for it, ensures the right person is hired at the right time, whether that’s from within or the broader market. Too often we are asked to recruit someone ‘yesterday’.

If Covid-19 has taught us one thing, it’s that panic buying is not a good model.

What starts well is more likely to end well.