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Jacqui McGill addresses AMCHAM Business Luncheon in Adelaide

Jacqui McGill, Asset President, BHP Billiton Olympic Dam
AMCHAM Business Luncheon - Leadership & Culture
Adelaide, 12 February 2016

Thank you for the invitation to speak today.

To begin, I would like to share something that is at the heart of leadership at Olympic Dam. It comes above all else and as I regularly remind the team, nothing is more important than it. And that’s safety.

This week has been a challenging one for the team at Olympic Dam as we marked the first anniversary of Brian Partington’s death in our workplace. We commemorated this anniversary the way his team wanted - a low key but heartfelt memorial of what Brian meant to them and the community of Roxby Downs. I always carry with me a strong sense of purpose as a leader to create a safe workplace, but the events of this week certainly bring home WHY that is so important.

When I considered the scope of my speech today, it occurred to me that in order to talk about what’s in store in the future for Olympic Dam, it is important to first look at where the operation has come from – so I’ll start by reflecting on where we were a year ago. February 2015 at Olympic dam was a very different place to Olympic Dam today. The mood was sombre – we had just lost Brian, and the site wasn’t operating at full capacity due to a failure of our Svedala mill, which is an important part of our production process.

Our teams were disengaged - we weren’t profitable and we had a bleak outlook. We didn’t believe in ourselves and we were quite rightly losing the faith of our stakeholders.

We were on every measure – unsuccessful.

We needed to act to secure the future of Olympic Dam – and that meant drastic action.

We took some strong decisions quite early – we made significant changes underground to reduce the risks our team members were exposed to. We continued to operate the Mine at full capacity, which enabled us to build inventory, and we took the opportunity to do significant maintenance in the surface plant while we had the time.

We also invested significant resources into reviewing the design of our organisation. This redesign has been monumental in changing how we work and in delivering value. It led us to simplifying our organisation- we went to a two General Manager structure (from 4), and increased the scope of our Managers and Superintendents. In total, these changes reduced our total workforce by 550 employees, and whilst these changes were difficult, they have improved spans of control and enabled clearer reporting lines and accountability.

I mention these four elements because they have been integral to creating the foundation of an Olympic Dam that is revitalised – and one that we can now continue to improve.

The actions are hard and tangible - which task orientated team members love. But we have also tackled the more intangible concepts of leadership and culture through very deliberate actions around leadership. These actions on leadership are all encompassing. We are investing in our leaders – both BHP Billiton and our contracting partners – to create a shared vision of success of what good leadership looks like, to ensure our entire business advances together in building an engaged workforce.

The journey Olympic Dam has taken in changing our definition of leadership is one which I believe has had a profound impact on Olympic Dam culture, and has been integral in delivering the most recently reported results.

For many, a leader’s key role is to pull the levers and drive results. This is a culture most of you would be familiar with – a strong focus on numbers and outcomes, with little consideration for the how and why we do things. We have developed leaders who are capable at pushing to get results as their main, or perhaps their only, tool in their toolkit. The results delivered in this way tend to be short lived and overly dependent on the leaders capacity for pushing for delivery, rather than tapping into the capability of the team.

Make no mistake, a focus on delivering results has a role – an important role, but it is my experience that there needs to be a balance. An over reliance on pushing for results drives a silo mentality – where different teams can end up working against each other, to the detriment of the organisation, all for the sake of ticking a box when it comes to a KPI.

At Olympic Dam we have been taking a different approach – one where we embrace the idea that the central role of leadership is to create the right culture, and that it is culture that will ultimately drive performance.

Now we aren’t on our own in this journey. One of my favourite TED talks is by Simon Sinek. Apart from his mastery in locking in the message (by repetition), he describes true leaders as being the leaders who start with WHY and not the WHAT or the HOW.

The simplicity of his message is persuasive and one that resonates powerfully for me, as it is amazing what happens when leaders start to focus on the WHY. 

I have seen amazing change taking place when you build capability in your leaders for creating the PULL skill set. A skill set that requires them to invest time and energy into creating context “why are we doing this?”, building engagement, posing questions rather than providing answers, developing their teams and being open to giving and receiving feedback. So what does this look like on the ground? Well let me tell you of my experience at OD. I was visiting the Smelter where we had a project underway installing new equipment. Now when I am in the field I like to ask about Safety and I try to get a feel for the culture. So firstly I asked the team what it was they were working on. Now, I was fully prepared for the team to say, ‘well we are installing this tank for the project team’. But instead, they shared with me the role their installation would play in recovering water which is a critical resource for Olympic Dam - so their project not only lifted safety standards, but also had an environmental benefit as well. I was blown away, and I can tell you that the team’s understanding ensured they felt part of something important and their contribution was valued by the business.

When you have a culture that gets WHY you are doing something – rather than telling them WHAT to do and HOW to do it – you build leadership at all levels of the business. When they understan d the overarching goal, you get 100% of your team working on the right problems – silos disappear and discretionary effort increases.

Let me give you some examples. At OD we call these Bright Spots….Bright spots are our way of celebrating our team’s success and acknowledging great work.

Nilesh is one of our warehouse team members and he was aware one of the primary hazards in his workplace was the risk of people working in proximity to a forklift. So what happened? Well Nilesh knew we value safety, and eliminating risks is at the core of what we do.

But he also knew that we had a strong focus on reducing spend. So what did he do: did he walk away from the opportunity or become discouraged because of the focus on spend? No. He was very clear that at the foundation of our values is our belief that all injuries and incidents are preventable and that with a little ingenuity he could deliver a safe outcome that was cost effective. So he went online and researched – he found a low cost detection solution that alerts a driver when someone is in close proximity, and which he was able to implement quickly. He engaged with his team mates and tested the idea for a very small cost. He implemented a solution that was quickly replicated across our business.

Now that is enough from me about the great success we have had so far- let’s hear from the team members who have delivered some great changes.

First up is Lucas Holbrook. Lucas has worked with the casting crew to maximise the amount of scrap we can put into our main smelter, which means we don’t have to use our secondary smelter as much.

Great work by Lucas and the team. Next we have three of our graduate mining engineers who will talk you through some of the great work the mine team has done to increase the throughput of our hoist, which is one of our key bottlenecks.

Behind all of these changes was a simple approach: we asked the teams to solve the problem. We explained why a change was necessary and then we asked them for their ideas to solve the problem. We worked together in implementing the ideas and gave them feedback on how those changes worked. And because of this approach, the ideas continue to flow – and we keep improving. Once people know WHY things are important, you can leave the ‘what’ and ‘how’ up to them.

Now I am a fan of Gary Hammel - I read his book ‘Leading the revolution’ many years ago. And there is a great principle in that book. He had researched some of the most innovative companies around the world. And this was his takeaway. Great ideas come from within deep the organisation. Not from the top! His logic was this: when you get ideas from those closest to the problem they are the Subject Matter Expert (SME). And when ideas come from deep within the organisation, only the best ideas bubble up! Their peers will robustly challenge and build on ideas, making them better so when the leaders get to hear about them they deliver incredible value. He then compares how this goes when you are at the top, or close to the top of the organisation – when you tend to get a lot of people agreeing with you because you’re the boss! And as a result - your ideas aren’t stress tested.

While these are only a couple of examples, results to date at Olympic Dam are certainly proving that Gary’s theory has significant merit.

Our copper production grew by 37 per cent to a record 112kt from the December 2014 half year.

The grade of our copper ore has also increased – by 35% in the December 2015 quarter, which is in line with the mine plan. Again, this is an important point to note – we are now regularly delivering production that meets our plans, which has not happened consistently for some time.

Overall, our copper production is now on track to exceed 200kt for the 2016 financial year – which is a great result and shows we are well and truly on the right track.

We’re also continuing to target a position in the first segment of the cost curve – this is incredibly important as we operate in a global market and must be competitive on that basis, not simply within Australia. We’ll push towards this through low-risk, capital-efficient underground expansions, including accessing the Southern Mine Area. Over the next five years, this will see us construct 120km of new tunnels – which I said to the people in Port Augusta when I spoke there last year was equivalent to building a tunnel between Adelaide and Clare. We’re also continuing work to reset our cost base through higher volumes and greater efficiencies, reducing our unit cash costs by ~34% in FY16 and ~48% by FY17 (relative to FY15 unit cash costs) – which will take us to unit costs of US$1.00/lb.

So is this the only way we measure success? No of course not but it sure helps to have some strong results early.

At OD, we are also measuring our results using internal surveys – here are a few examples of changes our team has noticed in the business between May and December 2015:

  • 87% of people agreed that we have made progress in ensuring safety is primary objective and making Olympic Dam a safe place to work;
  • 76% agree that we are doing a good job of being consistent in communication and explaining why changes are made;
  • There is high level of openness between employees and supervisors -78% of people agree or strongly agree that they can speak openly to their Supervisor about issues concerning them;
  • People feel involved in the decision making process - 76% agree that their line manager empowers employees and involves them in decision making process; and
  • Progress in reducing work complexity has also been noticed - 87% agree that OD is doing a better job of removing obstacles and meaningless rules.

When you involve people in decision making, you also get some broader benefit. Last year we asked our Adelaide employees about who they would like to partner with in the community. Overwhelmingly our employees told us they would like to partner with FoodBank - the state’s largest food relief agency that puts food on the table of those who might otherwise go without. Not only does this see us support FoodBank financially, it also sees our employees get involved and help out – which benefits us all. Greg Pattinson CEO of FoodBank is with us here today – and I would encourage everyone to think about the benefits that a partnership with FoodBank can have for our community, your teams, and your business.

Another very visible difference I would like to highlight is the changes we have made to our leadership team. Many of them are here today – so if you get a chance to say hello and introduce yourself, please do so. I know you will be blown away by the talented team that lead OD, and I am very grateful for their professionalism, leadership and good humour they bring to their work - every day.

In the significant changes we have made to the Olympic Dam leadership team over the past 12 months, we have doubled the diversity. In fact, Olympic Dam is the only asset in BHP Billiton that has 50% gender balance. In addition to this very visible diversity, the team are also diverse in other ways too - we have members from a broad range of commodities, different continents and both long term BHP Billiton professionals, as well as relative new comers to both the resource industry and BHP Billiton. I believe this diversity creates a culture of engagement where every voice is valued. People feel comfortable challenging and with some good natured but spirited debate, we are all inspired to do better and be better leaders every-day.

So, what does this early success mean for Olympic Dam and the future of the operation?

Simply put, the results to date are an absolute credit to the team and a strong endorsement of their hard work. They give us every reason to be confident that Olympic Dam can be a globally competitive and low cost copper operation. And we’ll be doing everything we can to continue tapping into our most valuable resource – our people.

But this is more than that just good news for BHP Billiton and the 3,000 Olympic Dam employees and contractors. As a major contributor to South Australia’s economy – spending over A$580m with South Australian suppliers and paying over A$70m in royalties and taxes in FY15 – these results are also good news for the State more broadly.

They demonstrate that it’s possible to operate a globally competitive mine and processing plant right here in South Australia – which supports my strong view that this State is not only a great place to live, but also a fantastic place to do business.

While this is still very much the beginning of Olympic Dam’s journey – and there’s no doubt we must continue to improve – we believe there is good reason to be optimistic about the future. Olympic Dam is here for the long haul.

Check against delivery.