19 September 2019
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Rag Udd, VP Technology Global Transformation, BHP
Speech given at AusIMM Mining Leadership Summit
Good afternoon, it is a great pleasure to be here.
I am Rag Udd, Vice President of Technology Global Transformation at BHP.
I’d like to acknowledge the Gadigal (Gad-i-gal) people of the Eora (Ee-ora) nation.
I pay respects to their Elders past and present and I look forward to a shared future.
Today, I’ve been asked to talk about the transformative power of technology.
It is a vital topic, at a really critical time.
For decades our commodities have helped fuel the digital revolution.
Copper for mobile phones, steel for electric cars, nickel for batteries.
These are just some of the innovations that have fundamentally changed the way we lead our lives.
While BHP is proud of our role in this revolution – the truth is mining hasn’t progressed at the same pace.
Until recently, our industry’s advances have been mostly incremental in nature.
Driven by mechanical advantage, brute strength and big equipment, combined with mostly physical and manual tasks.
While that approach has brought us many rewards, it’s no longer the world we live in.
Today, transformative technology like advanced automation, machine learning and artificial intelligence is challenging the status quo and creating new opportunities in every part of our business.
Take resource exploration for example.
We are now using advanced geophysics modelling and machine learning to re-analyse historical drilling data created decades ago.
It’s an entirely new, tech-driven approach to interpreting our exploration samples and it has led to our Oak Dam copper discovery in South Australia.
The increasing application of technology at BHP is both rapid, and game changing.
But what we are finding repeatedly is that competitive advantage is not about having the best technology (that helps).
It’s also about having the best people, with the right capabilities.
Leadership in the future will not be about replacing humans.
It will be about people working with technology - and ensuring we get the balance of humanity and technology right.
This is what I want to share my thoughts with you about today.
- How we lead through this change ‘inside the gate’, both as individuals and as a business, setting our people up for success.
- How we lead through change ‘outside the gate’, by
- Investing in the skills needed for the future, and
- How we develop our partnerships to solve shared challenges and create new opportunities so that everyone benefits
First, let’s talk about leadership, and the importance of leadership.
A lot of you in the room today are leaders.
Strong, dynamic leadership has never been more important.
Why? Because we must stay ahead of the wave of change and ensure we surf it in a way that brings our people with us.
The age of retirement is increasing – and that has broadened the workforce demographic.
This will create cultural challenges in calibrating the workplace to suit different generations, and more importantly, different life experiences.
We are not far off from having five generations in the workplace simultaneously.
This will result in millennials leading baby boomers and vice versa.
In fact, it is a very real possibility that in the future one of your grandchildren will give me a performance review!
Similarly, traditional career paths and the way we plan and map roles is much more uncertain in a world where the nature of work is fundamentally shifting.
For generations, career progression – and the skills needed for each step – have been relatively clear.
That is no longer the case.
We are now in a world where the roles available in 20, 10 or even five years haven't even been created yet.
So what do we need to do navigate through some of the ambiguity coming our way?
And more than navigate through it - anticipate it, plan around it, and thrive.
As leaders, we have a responsibility to create a proactive and positive environment for change that benefits everyone.
As I said, the need for dynamic, yet decisive leadership has never been so great.
And, tomorrow’s leaders will require a plethora of different skills.
They will need to:
- Be extremely good at learning and adapting;
- Solve problems with data in real time;
- Bring confidence and stability despite constant change; and
- Develop their teams when the future of work is uncertain.
Quite an ask.
At BHP, we know our leaders will be on the frontline of change.
And we are committed to doing everything in our power to ensure they are equipped with the right skills and support to lead through it.
We also recognise that we will need to do things differently.
In particular, our traditional support systems and processes for leaders aren’t going to be enough.
At our Goonyella Riverside mine in the Bowen Basin, we are studying the opportunity to implement autonomous haul trucks.
If this study is successful, this may be the first time we operate an autonomous fleet in Queensland.
This is really exciting - it has the potential to be a fundamental shift in the way the site operates and the way the team works.
In the past, we recognise that we haven’t always been as proactive as possible about early engagement, and our leaders haven’t been enabled to manage change.
In this instance, we have listened to our people early in the process and coached our leaders to support the change well in advance of anything potentially changing.
Because we know this approach will benefit our people no matter the outcome.
It won’t be perfect, but we are absolutely committed to learning and refining as we move forward.
We have been looking around the world at some of the big tech players such as Microsoft, Apple and Amazon.
We have learnt these companies are highly innovative and highly automated but also retain some of the biggest workforces in the world.
Competitive organisations create further opportunities, and as a result, more employment.
Robots and people can co-exist.
In fact, they can be a very effective team if leveraged and deployed appropriately.
And I want to take this opportunity to clear up a common misconception in the resources industry.
Often it is assumed that transformative technology, like automation, suggests no people are involved.
That’s simply not true.
At Jimblebar, one of our Iron Ore mines in Western Australia, we operate a fully autonomous fleet of both trucks and drills.
And yet, our team on site is made up of over 800 people.
The fact is the technology is only as good as the people who run it.
Like I said earlier, it is not about having the best technology, but great people with the best capabilities.
Balancing humanity and technology.
And this leads me to my second key point today.
According to McKinsey, there is a fundamental mismatch between the skills the workforce has, and the skills employers need.
Tech skills are a key area of mismatch.
And it is not just BHP that needs a highly skilled workforce, the whole sector - including METS companies - will also benefit from investment in skills and training.
The METS Ignited Staying ahead of the game report released by the Queensland Government yesterday found digital automation technology has the potential to add $74 billion in value to the national economy by 2030 and create more than 80,000 new jobs.
The report also recommended industry, education providers and governments need to intensify efforts to build a pipeline of talent to meet the rising demand for skills and innovation.
This includes transitioning today’s workforce into the workforce of the future.
Building a strong basis for R&D and skills in digital automation technology is a priority if Australia’s resources industries want to remain internationally competitive in the long run.
This research supports our belief that we need to develop our people and invest in skills and education.
We know we have a loyal, dedicated, and capable workforce.
To ensure we set our organisation and our people up for future success, we will continue to invest in skills, training, and education.
This means, as leaders, we must challenge old mindsets that people development is a once a year training activity.
More than ever, development must be a continuous process of life-long learning – one that we are thinking about every day.
Let’s explore this further.
At BHP, we know automation will play a big part in our future.
Automated processes, automated decisions and, of course, automated equipment.
I spoke about Jimblebar earlier.
It’s an excellent demonstration of what can be achieved when we push the boundaries.
In fact, it is now one of the safest operations in our portfolio.
Significant safety events have decreased by almost 90 per cent.
Who wouldn’t want that?
I also mentioned our potential plans for Goonyella Riverside in Queensland.
Beyond this, we see potential for a further 500 autonomous trucks to be introduced across BHP.
With this program of work in mind, we know we must double down on our efforts to understand the aspirations of our people, close the skills gaps – and build capability.
To help us prepare for a potentially autonomous future at Goonyella, we estimate we will provide over 40,000 hours of training across the site.
This ranges from general awareness to extensive training for those operating equipment, interacting with the autonomous haul trucks, or taking on new roles.
And this training will be delivered differently - through e-learning, classrooms, simulator and field-based learning.
In some cases, we will be training and re-skilling 40-year veterans of the industry.
We don’t underestimate that this will be challenging for some.
We also understand that it’s natural for people to feel anxious about their roles.
Yes, jobs will change – and some will no longer exist.
We know that won’t sit well with everyone.
Some will want to keep driving trucks.
But what I can say with certainty is that, at BHP, we will invest in our people.
We are committed to working with them as we move into this new environment together.
Ultimately this is about giving people options and being clear about transition pathways so everyone can take control, make their own decisions and shape their own future.
As I said earlier, we know old ways aren’t going to cut it.
In recognition of this, at our mines where the changing nature of work will probably be most significantly felt, we have launched a development program called ‘My Future’.
As the name suggests, this is focused on proactively preparing for change - the future.
It includes learning more about autonomous equipment and operations, transition pathways, training and re-skilling requirements.
Put simply, My Future is about listening to our people, proactively providing them with options and paths to get there.
It’s early days, but feedback is positive.
At Goonyella, all of our Superintendents and Supervisors within the Overburden and Coal Mining teams are actively participating.
Many have said they are excited by the options and opportunities created by automation.
Soon, these leaders will roll out My Future within their teams - reaching our frontline operators.
And we will broaden it out beyond that to other sites and teams.
Our intent here is straightforward - we want to create the best environment for change by not only giving people the tools to prepare for it, but also to be successful during it.
I acknowledge this is a different approach to how we have done things previously.
But this is what we mean when we talk about leading through change.
Now in addition to the above, we are also putting our minds to the workforce of the future.
This leads me to education.
We know we must build a tech-savvy workforce for tomorrow.
In 10 years, it is expected that half of the workforce will need robotics and advanced coding skills.
Not surprisingly, some of the big innovators are a few steps ahead.
We know of one organisation where all of their leaders across every division undertake 200 hours per year of coding.
We have ground to make up in this area and, for this reason, we are keenly focused on increasing our investment in education.
Let me share a great example.
In Queensland, we have partnered with TAFE and Central Queensland University.
We are working together to design and deliver both traineeships and tertiary qualifications in automation.
We want to ensure Queenslanders, especially those who live in the regions where we operate, have access to a cutting-edge education.
And, critically, we want to equip them with highly sought-after skills and competencies that we know will be needed by industry in the future.
I predict these graduates will have the pick of the opportunities in our sector.
What this partnership also shows is that we can do more when we combine our capabilities with others.
This leads me to the final area I’d like to cover today.
In the same way that we are changing the way we engage our workforce and investing in developing their capabilities, we have to think differently about how we work in partnership to collectively solve problems.
Because that’s the other thing about leadership - knowing when you don’t have all the answers.
We know that our progress and success will be strengthened when we partner with other stakeholders.
This is especially relevant in the regional communities where we operate.
It is in all of our interests to have successful, sustainable communities.
Being at the forefront of technology and innovation sets us all up for the future.
And that is why our partnerships with regional governments such as the Greater Whitsunday Alliance – or GW3 as we know it – are so important.
Late last year, GW3 and BHP formed a strategic partnership aimed at enhancing the economic sustainability of the greater Whitsunday region.
Through this partnership, we want to work side-by-side with these communities – who are already showing leadership in this space – to plan for the future.
I have seen firsthand the thought leadership of the Mayors of Isaac and Mackay, two of the key resources regions in Queensland.
In fact, last month, through GW3, the Mayors led an incredibly timely public conversation about how their regions can get ahead of technology and transformation.
They recognise the imperative to set themselves up for success – and to be frank it’s an honour to partner with them.
We have also partnered with Queensland’s Palaszczuk Government and Mackay Regional Council to co-fund a Resources Centre of Excellence.
It will be a one-of-a-kind facility in Mackay – designed by the industries and customers that will use it – housing an underground mining simulator, a research lab; and enhanced education facilities.
For us, these partnerships and investment make perfect sense.
Humanity and technology side by side.
So, in closing, the rapid pace of change will affect every industry and everyone.
We believe those who embrace, adapt and lead through change will thrive well into the future.
As leaders, we must challenge outdated mindsets and think creatively about how we best embrace change.
We must invest in our people and train our workforces and communities to make sure they have the right skills and capability to flourish.
And we must work in partnership. With our people, our communities, with government and across industry.
Sharing our challenges and solving collaboratively will secure our future prosperity.
It is a complex challenge.
But if we can get it right – and I believe we can – everyone can benefit.