A breath of fresh air
IN THE ALMOST THREE YEARS since David Noko has headed De Beers Consolidated Mines (DBCM) he has – with his experience in South Africa and overseas at SA Breweries, Pepsi Cola and running Air Chefs – challenged the mindset of both the company and many in the country’s mining industry.
Noko seems to be a breath of fresh air in the mining industry, which he says is too slow to adapt and change, something he’s succeeding in trying to rectify at De Beers. Says Noko: “Mining – in terms of innovation and futuristic thinking and technology – is behind the manufacturing sectors. The reason is that the industry has just a single universal model of looking at things, the community is insular. Second, there’s a resistance by some to change. And the industry is highly regulated. And wherever you go anything that’s highly regulated isn’t likely to be agile, innovative and flexible.”
However, he says at De Beers there was evidence of innovative thinking but it wasn’t being communicated throughout the organisation. Rather, people were working in disciplines looking down into the organisation rather than taking a systems approach, which instils work practices that unite the company and work throughout the groups of specialist disciplines.
“First of all you have to recognise there are certain principles you have to live by and if you don’t adopt those you’re never going to make any strides. I believe there’s always an alternative to the way we do things. I always say the biggest brake on innovation is the question: How do we do that? The sooner we stop asking the question ‘how’ we’re going to be more innovative,” says Noko. “I always believe there’s an alternative – there’s often a better way.”
Noko joined De Beers as an engineer in its corporate headquarters in 2002. By 2003 he was GM at its Kimberley operations, which he returned to profitability and achieved the highest production in 90 years. In 2006 he moved back to head office in Johannesburg as MD DBCM.
“De Beers was operating well and was technically outstanding but it could be working more efficiently,” says Noko of the company at that time.
Understanding the company as a business became very important. He says he immediately realised some assets might not be working at an acceptable level and either had to be brought to that level or disposed off.
Ultimately, De Beers sold its Kimberley underground operation and its mines at Cullinan and Koffiefontein. It also announced an intention to divest in Namaqualand. “The process of rethinking the business structures started in 2004 and then, in 2005, we looked at all the businesses. By that time we had the platform for restructuring, I’d done it at Kimberley and we had a confident and skilled team,” says Noko.
He had to make some tough decisions and now the results show a shake-up at the group was very much in order.
Productivity jumped. Between 2003 and 2007 productivity per employee increased by 180%, says Noko.
“We’ve optimised ourselves. We’ve maintained our output, we’ve grown our profit, and our ability to generate more cash has been improving year on year. I can proudly talk about the fact we have introduced a philosophy of working in our business that’s led to our sterling performance,” says Noko.
He says offering incentives to the workforce is key and DBCM introduced a profit share – or ’gain share´– programme to incentivise the front line about safe working practices and other productivity indicators.
While De Beers had decided to sell some of its mines, it’s continued to invest heavily in SA. Since 2004 it’s invested more than R3bn upgrading its Finsch Mine, commissioning Peace in Africa (a marine diamond vessel) and starting its Voorspoed mine.
The R1,3bn Voorspoed Mine has come on stream ahead of schedule, creating 700 jobs during construction and over 400 mining jobs (50% for local residents), of which 25% of the mining technical posts are filled by women.
Noko talks with conviction about introducing a new philosophy of working at De Beers and how employees communicate more within the company, sharing both good and bad news and setting out DBCM’s goals.
He doesn’t mince his words when it comes to his views on who are the most important employees in the company.
“Who is the most important person in the organisation? While everyone is important, I think I can venture to say the front line employees are the most important. They’re the ones who wake up every day and go underground, or get into that massive vehicle and go to the bottom of the pit. If I’m short of a rigger or shovel operator or a haulage truck operator I replace them in a minute. As soon as that person isn’t there I’m short x number of tons in my process,” says Noko.
Training has always been important at De Beers, and Noko says it’s vital not only to increase its skills base in the company and the country but training is also key to enabling employees to understand and learn about the company’s philosophy.
“The De Beers Lesedi Training Centre is based in Kimberley. To back the system up you need to institutionalise an operating philosophy. You don’t buy it off the shelves, you don’t rent it – you institutionalise it. You make the employees understand and shape it,” says Noko.
As well as providing opportunities for skills development in SA, Noko says a culture of accountability has to be introduced. Of
SA in general he says: “We don’t actually hold people accountable. We’re very good at listening to excuses when things have not gone right.”
Noko is positive about the future of the diamond industry. Referring to the credit crunch among Western banks he says De Beers will be affected. “Are we going to be affected? Yes, we’re going to be affected. We’re going to feel the impact of the slowdown in the world economy. Are we planning drastic changes and shifts in our organisation? There will be some moderation in our organisation but it will be an optimistic moderation. It’s not doom and gloom here,” he says. Taking a photo of a diamond for further analysis by Gemdl, De Beers’ macro diamond laboratory situated in Johannesburg.