A breath of fresh air

Finweek English Edition - - Finweek - David Noko

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.

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