Experiencing Transitions in Level of Work - Personal Experiences - Mark Cutifani

Speaker A Ladies and gentlemen, for the request to share what we're going to talk to today is for me a privilege. If it adds value in terms of the discussions we've been in today and certainly the whole theme of the few days, I will say that I've had this conversation with my work colleagues and we've used this conversation to help people understand or personalize transitions and conversations about capability over time and trying to use a personal experience and the good, the bad and the ugly in terms of those personal experiences to get people comfortable with the conversations. And maybe help them understand themselves in terms of the process, which, at the end of the day, if you understand yourself, then you certainly got a better chance of understanding others and being able to empathize and I think lead more effectively. And so I use this conversation as a personal piece to help start a conversation in terms of who we are and open yourself up to the team that you work with. And so I do it in the spirit of sharing and there's some personal stuff in here, but again, I think it's relevant in terms of the conversation. So from my point of view, I hope it adds some value in terms of the conversation. As we said earlier today, I started with CRA straight out of high school, so I was 18 actually. They had cadetship or cadet programs for young people where you could actually do university. You had a day, one day release for university and you'd do two or three nights during the week and you'd work through the rest of the week. And so I was very lucky to be allowed to do that program. I actually started off in a certificate program and then switched into a degree program when I had my school results come through. So the company was very supportive and gave me a great opportunity. So I progressed through a number of operating departments, spending no more than eight months in any one department and always very keen to have a good look at everything, whether it was the safety engineering survey, underground operations, surface processing, all facets of our mining operations. And I studied in the coal industry, underground coal mining industry, so was given a great exposure at a very young age and was able to apply the theory that I was seeing at university to practical situations and went through a fairly steep learning curve as an individual as well. And so I pick up the story from age 25 in terms of the roles I had in the organization and you would have seen the maturation curve, so I've used that as a backdrop and I'll just build up my career moves and organization moves using those maturation curves. One thing I'd say from the outset is like all of these things, your personal life does play an important role in your work life and vice versa. And so there'll be a couple of personal observations I'll make through that process because I think they're relevant. And in fact, Ian McDonald shared with me some observations and research work he did with people in industry and certain characteristics of certain individuals and helped me understand maybe a few things about myself that I hadn't understood. And I thank Ian for that. That was quite insightful for me in terms of the learning process. Firstly, as I said in going through CRA, at about 25 years, 25, almost going to 26, I was actually the underground manager for Australia's largest coal mine. Again, I'd been lucky. I'd had six years experience hopping through various parts of the business. So just literally finished my degree and had set for the statutory tickets that you require to hold to run the operations. And so, as I gained my statutory certificates was put in roles of responsibility fairly quick. And so stratum one, stratum two, and then into a stratum three leadership role that occurred in a period of around 14 months, the three steps. Part of the reason I was given that opportunity so quickly is we'd been through a fairly significant strike and some really difficult industrial circumstances. And as a consequence of that, the manager of the operation and the general manager of the operation were actually taken out. And when they looked around and said, well, who's left standing? I was probably the only one left standing. So I was given the opportunity to run the operation. It was a large operation and it was a great experience. I was not prepared for the role, but I think fairly quickly and more particularly with the support of the people that we had in the organization, we were able to make a pretty good fist of it. In fact, for three years on end, we were the highest productivity operation in the country in coal. Interestingly, in CRA. CRA really struggled with underground coal mining and for those that would be aware of some of the positions CRA actually took with its underground coal operations and at one stage had made a decision to step out of underground coal because of safety issues and the difficulty of turning a profit. So it was an interesting time for me in an organization that wasn't particularly enamored with the business I was in. And so I remember my departure conversation with Lee when I was offered another role. Clifford was actually the managing director of our operation. And so Lee was describing some of the concerns he had with the underground coal operations and the difficulties and the challenges and that CRA was still working through the process of coming to grips with those operations. And he was describing my personal career path. And with that I decided to maybe look at other opportunities in terms of developing through the organization. And I actually went to a company called Kalgooli Consolidated Gold Mines, which was an operation in the middle of the Western Australian desert that actually had eight underground operations losing money quite significantly. The technical team had conceived a new concept for mining but really were struggling in terms of how to pull all that together and how to rationalize the operations and how to rebuild the culture within the business. And what they were looking for was somebody not from the gold industry and someone that probably didn't have a sense that this probably couldn't be done. So they were looking for someone fairly young and naive. And we'd had a couple of people actually go through the operations that I was involved with in CRA and we'd made some fairly significant changes and again with the support of the Ro program, changes that we thought which really did support the work we were doing and in fact I think made a tremendous difference to us. And I was actually articulating my understanding of Ro to this individual and he was doing some consulting work for us at CRA. He actually went on to be the general manager of operations for Bond International Gold and they had these operations in Kalguli that were struggling and they were looking at some new concepts and so I was recruited in as the mining manager there. So that was at 29 years of age and you'll see that's what we're actually showing there, the first line is a four high. So as the mining manager of seven underground mining operations plus three relatively small open cut operations and again that's employing about 2000 people and the idea was to actually change from that configuration to create the largest open cut gold mine in Australia and one of the largest in the world. And we had to do that within a period of about 18 months. So it was a fairly significant change strategy required. And included within that was a very significant social management strategy because the operation having 2000 people had to be actually taken down to around 700 people. And the operation was actually in the heart of a city of around 30,000, and we were the major employer. And so there were a lot of things that had to be navigated, a lot of complexity. And so I was the mining manager for that operation for the first 18 months as he actually went through the whole reconfiguration design implementation and then was put in charge of all the operations which included all the processing operations which is where you see the second step into a five layerl. So I was actually running all the operations within the Kalguldi operations which included processing all the technical support functions within the group. Needless to say we were relatively successful. There were a lot of naysayers and people that said that the new concepts that we'd introduced wouldn't work and fortunately they did work and were very successful and in fact became the model for large scale open pit mining in Western Australia. After the work we did in around it was around 1988 through to about 1992. And for those, some people would know that Barry Dean and others would know the Super Pit. And we had a very good young team that actually implement that change. And for me, I was somewhat frustrated. I'll go back a little bit to CRA. I was frustrated in the process and quite frankly, that's not anyone's fault within CRA, in my view. It was just frustrating because you felt like you had bricks on your head in terms of the role we were in. And the move to KCGM was a big step. And again, from a skills and experience perspective, not prepared because it was quite a change from going from underground coal to open cut to large scale open cut gold. The good news is I knew the underground operations, but it was a big step, but the work was invigorating. We're involved in doing a lot of things. My boss was great, and I suspect my view on my boss reflected that I was actually enjoying the work I was doing in that next step. And I reflect back on my time in CRA and I suspect the frustration I felt was not so much an issue with CRA. It was my own frustration with where I was and the work I was doing, more so than the way I was handled within CRA. Certainly from KCG. I had a great time, was there for four and a half years, and again, it was a great experience. The problem with developing something so different, so large, and from my point of view, probably fully extended in the role, was we were spending long days at work and I was probably going through changes and as a consequence personal relationship suffered and I actually went through a divorce in that same period. And so it's interesting to hear people talk about the transitions you go through and the frustrations and then the liberation. And probably through that period I was going through a fairly significant change in my personal life as well. And it was interesting. We'd broken up and my wife and my three children went back to the eastern states, hence came the next move. So at the end of five years. And KCGM was a medium scale company, but was actually a joint venture. And so in actual fact, where to from there was quite difficult because you had two owners that could never agree on where the people from the joint venture would then go. And so instead of worrying about the argument in terms of where you'd go with my wife and three children going back east, I decided to look for a job back east. And so I was quite happy to take a step back with a company called Savage Resources running their coal business. It was a smaller business, it was a smaller sized job, and it drove me nuts for about 14 months. And whilst we did a lot of things and made a lot of improvements. And at the same time, again, for those in Australia, savage Resources actually won the Ernest Henry dispute with Western Mining. And so a penny dreadful company became a mid cap in Australia over a period of about 18 months. So it was very exciting time and very profitable time in terms of having share options. So there were no complaints about the time I spent, but the job drove me nuts. And so within about 14 months, a company called Western Mining had knocked on the door and said, look, we were familiar with the work you did in Western Australia in reconstructing the gold business in Kalgoorli. Would you be interested in coming back west and working with us in Westerns? We've got a fairly significant nickel business, and we'd like to restructure it, double the size and do a few other things, including introduce some new organization concepts, try and turn a fully unionized group of five operations into a nonunionized group of operations. So we've got some fairly significant challenges. Would you lead us? And for me, that was a fairly easy call. On the personal side, proximity probably didn't help things anyway, so I headed back to Western Australia. And given that you're frustrated in the role anyway, it probably doesn't help your demeanor. And quite frankly, moving back to Western Australia and being happy in the job, I think I was a much better person to deal with anyway. So was then put in charge of the Western Mining nickel operations and Western Mining's nickel operations, just a sense of scale, about three and a half thousand people. Third largest nickel business in the world, or at that stage, was about the fifth largest nickel business. We were in the process of three major expansions totaling about $1.2 billion. And that was in 1994. And so a billion dollars really was a big number in those days, going through major expansions, five major operations, each with more than 500 people. We actually introduced it was actually the same time CRA was going through significant change at Weeprint in its operations, introducing workplace agreements, going from union to non union. And we actually went through the same process. So we actually did our five sites. We took some fairly tough industrial issues on. We doubled the size of the business. We commissioned one of the, in fact, what was that day, the largest nickel mine in the world and made some fairly significant changes to the business reconfigured and the business and the whole process over four years was very successful. Again, got to a point where had great fun, but was somewhat frustrated in role. And I had a long talk with the boss of the organization, Hugh Morgan, and I made an observation that the organization was not going to groom his successor. And what I said was that the way you're bringing people through the organization is you're not recognizing the capability you have in the business. And for people like myself who are operational that I think could offer other skills in terms of other parts of the organization. They weren't prepared to actually take you into financial parts of the business to actually give you breadth and experience. And it was a fairly long conversation. And for those that followed the Western Mining conversations post 1997, it was interesting to watch a guy called Andrew Mishamore, who actually ultimately followed Hugh, who was, again an operator, who came through the operational stream that didn't have the financial experience. And in the end, he took the role over from Hugh. But it was quite an interesting process to watch that. And Western Mining was actually taken over by BHP and that was in a takeover battle with Extrata. But I thought the conversation was interesting because there was this debate about capability and working in various roles and there were certain roles that were seen to be sanchrosanct. The financial was one that they weren't going to touch. And so the one thing about CRA I thought was very good is they were willing to move people through the organization. And I think the more people understood the principles that had been introduced through Ro, the more willing they were to promote that type of lateral movement and lateral development of their people. And I think they've been very successful generally in bringing people through the system and again, always very thankful for that experience, but that was tougher in places that hadn't introduced the Ro principles and in Western mining. I think the big contribution I made, and this is how I felt about it, maybe others might say differently is we actually brought the Ro principles into the Nickel business and used and actually introduced the levels of work capability. We developed the integrated planning process that ultimately became the model for Western mining. And they were things that I had been exposed to in CRA and then had put my own views on how certain things should fit together. And it's interesting, even today, Western Mining's nickel business is one of the main businesses in Australia that's been able to maintain its non union status on the basis of the relationship that people have created at the workplace. And the OpenCat operation that we started was still the most productive hard rock OpenCat mining operation in the country. And a lot of things we established and again based on basic Ro principles have held up to this day. And Mount Keith is the operation that we talk to for those that may or may not be aware of it and certainly was very successful. And again the Ro principles were introduced in that part of the business but was not embraced fully. McKinsey did a lot of work and actually cherry picked a lot of the stuff but it was never actually embraced in its entirety and I think other parts of the business ended up not being as successful as the nickel business. And I think I really put that down to the Ro principles and some of the other elements that we introduced. Having had the discussion with Hugh and he, you know, we see you as you've done a great job with the operations, but we want you now to go and look at Olympic Dam and get that project under control and we think that'll be your next three years. And I said, Well, I've just done that and I'm not keen on doing another three years, which is the copper uranium site. A fellow by the name of Robert de Krepney rang and said, look, we're looking for a group executive for our global operations, Normandy Gold. And the one thing Robert said to me, he said, you're an operator and you need financial experience if you want to be a CEO. And the promise Robert made was you would be on the executive committee. In fact, you'd be the group executive. You were effectively the chief operating officer. You get the financial exposure, you'd be part of our risk management committee and we will give you that exposure that you will need to go that next step in your career. Interesting, I knew Robert from KCGM. Normandy was 150 percent of the ownership of KCGM, so there was a history there. And again, it was an interesting step. It was a global role. We had the operations around the globe and for me that was a big step. And the one really important piece of feedback, robert asked me a question about the capital of Ghana and I couldn't answer the question. And he said, well, what you've got to do now is get out and become a bit more worldly and understand what's happening around the world. And he actually set me a couple of tasks in terms of learning about those sorts of things and the role in terms of personal development. And I worked as a group executive there for about two years. Within about two years, Robert and I were butting up a little bit on strategy elements, but in terms of giving that breadth and growth, it was great. But then Normandy was in a discussion with Newmont and Newmont actually ended up making a significant bid for the company. I was aware of that and so were a few others. And so a fellow by the name of and he was the executive chairman of Sons of Wallia, which was about the fourth largest mining company, about the 6th largest mining company in Australia, he rang and said, well, Robert's going to sell the company. Would you like to come and be the chief executive or the managing director? And what we'll do is we'll organize a two year transition and you'll take over as executive chairman. One of the problems in going to Guala and for me, being ambitious, keen as mustard, tending to be a little bit frustrated with leadership. If I didn't agree with the strategies that were being put in place. And that's not a criticism of the leaders, by the way. It's probably a criticism of myself in not being patient, not being able to listen as well as I probably should have at that stage. Joined sons of walia. Interestingly, sons of gualia had some fairly significant hedging gold hedging foreign exchange positions that the out of the combined out of the money position of those hedged positions are about $1.5 billion, and we had a market cap of 400 million. So I spent three years getting to know the bankers really well, and it was probably the most frightening experience up till then, about 25 years in the industry. And it really did test you in terms of something quite different. But also in the conversations, we had a difference of view in terms of disclosure to the market and a whole range of other things. And so for the first time, for me and it'd be unfair to say and I don't want to say there was an ethical issue, because that's a bit unfair, because the disclosures were all there, but the degree of disclosure and how far you went through the process was something that I was uncomfortable with. And having come from operations where you tend to probably let everybody know everything that's happening to one of managing commercially sensitive information and managing relationships and managing shareholders. And if you go back five or ten years, there was a real debate in Australia about disclosure and this argument that there were two camps. We disclose too much and we don't disclose enough. And so that period tested me in terms of values and the position you take in business, so much so that I decided that I wasn't prepared to stay with that. And so inco knocked on the door and said, and at that stage, if you go back to the discussion with Robert decrepny, not having enough global experience and having a taste of it, but not really, I don't think I really embraced it to the degree I needed to embrace it. And the other thing that I was starting to have a much greater sense of is the role of mining in industry and society and a whole range of other things. And quite frankly, when you're in a conversation about hedge books, it didn't really and I suppose I wasn't really valuing the work when you were that narrow in terms of the focus. And so the opportunity with inco was one of big step back, but lots of opportunities to actually review the business and work with people that I thought could align with from a values and an ethics perspective. And at the same time, five best nickelore bodies in the world, lots of potential, lots of opportunity leadership that was willing to go forward and look at growing the business. And so from my point of view, it offered a whole range of things, and I've never been concerned about taking a step back to go two steps forward. So I was prepared to take the step back, and I took on Vice President Canada UK doing some business evaluation work. And I almost linked back to the story this morning where I said, we started off in over three months, we went back to the executive and said, we think the business model might not be the best model for this as a business. And so why don't we look at and we introduced the concept of option theory and option values and how you might think quite differently about the way you run the business. And so that captured Scott Hand and that business model change and a few other changes like that captured their imagination. And so with Inco, I'm now in my fifth job, and my colleagues, some of my colleagues have said they're still trying to find me a job that I can do. But the one thing I found with Inco and now with CBRD Inco, we've had the opportunity to be creative in the work, work with people, work with teams. The work that we've done and the introduction of the Ro principles has actually, I think, helped liberate all of us in that process. And certainly for me, the fact that I'd taken a step back in my career to go there, I've been very fortunate to have people that have supported us and certainly had great opportunity. So I started off in VP of Business, was then appointed in charge of the mines through Canada to implement some of the changes that we suggested. We did that for about six months, then took over the President of the Ontario role, where we did all the restructuring after about twelve months, was then appointed President of the North American European Operations. And then in October last year was appointed Chief Operating Officer for Inco, which was confirmed with CVRD as the takeover was going through, and now responsible Chief Operating Officer for CVRD Inco. And we have operations in Brazil, projects and operations in Brazil, throughout Canada. Obviously, small operations in the US. Two refineries in the UK. Large operation in Indonesia, developing operations in New Caledonia, and obviously all for us as a mining company. Other projects and joint ventures in other parts of the world that we're looking at developing over the next five to ten years. So it's been a journey. And one thing I've learned is it's okay to take a step back, but make sure that you understand the work, the step backs you're taking and the nature of the work that you'll be doing. In the first case when I took the step back, it drove me nuts because I really hadn't considered the nature of the work I'd be doing. In stepping back with Inco, I had actually defined the role to my prospective boss. I said, look, I'd be prepared to join if this is the job. And he was very keen. And Ron Ailek and Peter jones the guys within Inco were very supportive of Scott ann were all very supportive. And I'm given the opportunity to actually progress through the organization and enjoying the work I'm doing today.