In our final article in the Futurecasting series we end as we began, with the donkey. These animals are both a good way to transport material underground and completely unacceptable in today's mining operations.
Once ubiquitous, donkeys were doomed to obsolescence once the age of mechanisation began, with every quality miner adopting their mechanical replacement.
In hindsight, the reasoning behind this shift is obvious, but it should have also been obvious before it began.
Those in the industry paying attention to trends would have noted the usage of machines across industries and in their daily life. They would have seen the macro-economic and societal drivers that would lead to the use of machines in industrial settings. The exact nature of the machines and how and when they would replace animals would not have been defined, but the trends would have been there for those paying attention.
The more future-focused companies, those who scanned the horizon, clustered the trends and considered what they could mean for their business, would have been better prepared and able to use this shift to gain a competitive advantage.
With this knowledge, they led the move from donkeys to rail cars, from rail cars to manned machines, and from manned machines to autonomous vehicles.
Major shifts emerge
We call this scanning, clustering and action-based interpretation Futurecasting, the output of which is a vision that can inform decision-making. Our six-part Futurecasting series has explored different visions, including operating models, large and small, one organisational model and a business model.
These visions give us an idea of what the future may be. They allow us to cluster the trends of today and think about where they could lead us. We know that Futurecasting is not prediction, as ultimately, the future reality will differ from those we have imagined. Futurecasting does, however, give us an idea of where the mining industry is headed and reveals specific lessons and shifts that will be true regardless of how the future evolves.
Now to explore some of the future ‘machines' that will replace today's ‘donkeys'…
- The rise of computing capacity and machine capabilities will change the game. The exponential growth in computing capacity will transform how companies operate. From computers and machines working together and making decisions without human intervention to the emergence of human and machine integration, the opportunities will be striking. What is more, this change will happen more quickly and more profoundly than we all expect.
- Automation and remote operations are coming. The self-driving trucks of today will open the door for machines that self-assemble and regulate, or nanobots that swarm independently underground. While some of this is a way off, there will be less need for physical human intervention than even the remote operating centres of today require. What's more, many foundational elements are implementable today, such as driverless trains and trucks, remote-controlled underground skips and self-regulating plants.
- The mining business will join other industries in becoming more future-focused and customer-centric. As the ability to eke out competitive advantage from operating capabilities diminishes, differentiation will come not from how well companies operate but from how well they foresee and fulfill market demand. Companies that adopt a ‘future focused' stance will be better equipped to meet the changing needs of the market, including new products, and will constantly adapt to maintain a competitive advantage.
- The ability to collaborate and manage transparency will be critical for success. Success will depend on better-quality decisions and the processes that support them. This means that companies will need to become adept not just at collecting and analysing massive amounts of data, but also at breaking down barriers and involving a broader group of collaborators in the decision-making process. This will require new organisational and business models that transcend the internal silos that exist today between levels of management and divisions, and the external walls that separate companies and suppliers and stakeholders.
- There will be unexpected opportunities. More a truth than an insight, the uncertainties within the development of macro, social, political, technological and industrial forces mean that surprising and unpredictable opportunities will emerge. Whether this includes more efficient operations with smaller footprints opening up previously uneconomic resources, just as hydrofracking has opened up vast new gas reserves, or something even more impactful, the successful companies will be those that constantly scan for the emergence of these opportunities.
Implications for business strategy
These operational lessons and shifts have implications for business and investment strategy. Apart from the obvious technology investments, they suggest that natural-resources executives should focus on:
- Collaboration: This involves the breaking down of internal silos and investing in improved external communication, collaborative environments and single-source data.
- Engagement: Investment in increased engagement and brand management with local stakeholders will support superior decision-making capabilities and collaboration efforts.
- Future models: Executives should be willing to rethink their existing business models as well as how they could derive value in the future and invest in innovation efforts to build platforms for tomorrow.
- Flexibility: Given how responsive to market demand companies will need to be, flexible operations that can adapt to changing market conditions and customer needs will represent a key capability.
- Staged investment: Companies should begin making staged investments in remote and automated systems, both to develop internal knowledge and to prepare for larger-scale future operating models. Small steps in this direction can yield significant rewards.
These shifts are just the beginning, as the world is constantly changing and evolving. Even as we discuss these visions and their implications, new disruptive clusters of trends will emerge that will affect how industries develop and which companies will dominate.
Change may be constant, but the speed at which it happens is not. The rate of change is increasing exponentially, much of it driven by technology. Businesses must adapt at a faster rate to maintain relevance.
For example, 20 years ago several dozen entertainment industries were represented in the form of products such as VCRs, video cameras, music players, radios and more. Then, we would have required an entire room to house these items. Today, all of these, plus a powerful computer, fit in our pocket in the form of the modern smartphone.
The rate of change that moved us from 20 diverse industries to one product over 20 years is staggering, but it will pale in comparison with the change that will occur over the next ten years. Businesses that expect to thrive in a market that is constantly changing at an ever-increasing speed will require constant renewal.
The challenge is that there is so much more information available, so much ‘noise', that it is difficult for businesses to sort out what they need to pay attention to, even more so when they operate on a global scale.
The power of Futurecasting
Futurecasting is useful at improving this ‘signal to noise' ratio and discovering what opportunities the future holds. The process requires companies and their executive teams to embrace the possibility of change, to open their minds to outside inputs and explore possible future opportunities.
In doing so, they make choices that lead to a future vision and roadmap; a foundation for strategy development.
Futurecasting helps organisations to discover the underlying shifts and opportunities by providing:
- Systemic value: Significant innovation rarely develops in a vacuum, but is enabled by other technologies and trends. Futurecasting blends trends in a systemic way to show how they relate to each other, leading to a greater impact than a single technology alone.
- Contextual relevance: Industries prioritise and absorb disruptions in different ways. Futurecasting explores technology trends within the context of an industry, leading to more relevant and actionable insights that are in tune with how technology may realistically develop.
- Clarity & communication: Separating out which shifts will be the most valuable and communicating why these will be impactful is always difficult. Futurecasting focuses on how systems develop over individual technologies, reducing the noise created by too much and conflicting information. Furthermore, Futurecasts are usually accompanied by some sort of visual depiction and stories. This brings technology to life, making it communicable to all within an organisation and easier to accept.
At its simplest, Futurecasting allows companies to become more future-focused, and to develop the capability for strategic foresight. By bringing in outside inputs and forcing executives to combine, connect and collaborate, the process clarifies what really matters and opens minds to possibilities that previously could never have been considered.
We hope that you have both enjoyed and learned from our Futurecasts, and see how they can benefit organisations that are willing to pay attention to the future. After all, a company that doesn't pay attention to where business is going might as well be investing in donkeys.
The Stratalis Group is a strategy and innovation consultancy focused on helping companies in the resource industry to discover, develop and deliver new pathways to growth, increased profitability and superior return on their investments. See: www.stratalisgroup.com