HomeNewsRecognising that societal needs, not just conventional economic needs, define markets

Recognising that societal needs, not just conventional economic needs, define markets

Every stakeholder has a role to play in keeping the mining industry afloat and in optimising development opportunities. If we recognise that a win-win scenario is first prize, as encapsulated in the term shared value which Michael Porter and Mark Kramer first wrote about in Harvard Business Review about in 2011, then what’s holding us back?

Briony Liber, partner and principal environmental scientist, and Anita Bron, principal social scientist from SRK’s Johannesburg office stress the importance of shared value and the role every shareholder has to play in keeping the mining industry afloat and in optimising development opportunities.

Quite simply you can’t achieve shared value without addressing the lack of trust between the various parties. Our experience is that while everyone might have the same outcomes in mind, it’s practically impossible to have the conversations that lead to shared value because most role players don’t trust each other.

Shared value hinges on the idea of business evolving beyond an ‘outdated approach to value creation’ and, as Porter and Kramer put it: “Recognising that societal needs, not just conventional economic needs, define markets.” To achieve this, all stakeholders, as Cutifani says, must come to the party. Mines should no longer be the pivot around which communities exist. Mining can and should only be used as a tool for development. Understanding this requires a 3D perspective of societal complexity. It means that every decision made should focus on the shared goals and vision for the mine, the community and all stakeholders.

Of course, you can’t achieve shared value if the enablers aren’t there and we need to appreciate that shifting mind-sets won’t happen overnight. But, the following practical steps can help move us closer to this end goal.

1. Developing a common language. Often times we misunderstand each other because there’s a disconnect between the language of business, social and environmental practitioners, municipalities, government, labour and communities. Until we understand the nuances of each other’s words and meanings, we can’t effectively communicate. When we understand one another’s meaning and goals we have a point of departure from which to communicate and build relationships that contribute to shared value. Addressing this will take time, patience and trust.

2. Long-term vision. It’s hard to picture what will happen in 20 or 50 years, which is one reason why mine closure planning is always a challenge. But if conversations begin with a long-term commitment to build relationships to achieve particular outcomes, then we are better equipped to engage meaningfully. The reality is that if the mining sector does not stay in business there is no shared value for any stakeholder. But often stakeholder objectives have different timeframes – a budgeting cycle, annual compliance requirements, a period of tenure, survival to next week. The divide between each decision making timeframe can lead to the development of budgets that don’t see a community development project through to sustainability because the budget is linked to a budget cycle rather than the point at which the project is self-sustaining. The outcome, in such instances, is Social Labour Plan compliance (because the project was delivered), but there is a fundamental lack of shared value and trust, because the project did not deliver economic and social value. Shared value, in its truest form, can only be achieved by harnessing strategic, long-term planning and implementation.

3. Stakeholder engagement from the earliest opportunity. Shared value is contingent on stakeholders working together towards an outcome. That requires trust. Building trust must start from the moment exploration activities commence. This requires that the first people on site – drillers, exploration geologists, etc – are skilled in engagement and can manage expectations rather than raising them through expedient decision making.  It’s too easy at the early stages to adopt a paternalistic approach to community development, which immediately raises expectations and dependency, rather than linking to existing community initiatives and skills. This can create the perception that the only stakeholder with any responsibility to create value is the mine.

4. Stakeholders have a responsibility. Shared value requires active stakeholders that are drivers of economic development. Our work in many African countries has shown that decades after government-owned mines have been privatised stakeholders still perceive the mines to be providers of all social infrastructure and services. Provision of these services is, of course, the domain of government but unfortunately a lack of delivery from municipalities and the state contributes to the dependence of communities on mines. It also adds to the frustration mines experience when attempting to deliver economic development without active or capacitated partners.  The victims are trust and lack of shared value.

5. Leadership. Without leaders to create a vision and mobilise people around a goal, achieving any of the above points is impossible. We need to be conscious that leadership is not management and it requires a specific skill-set, including the ability to communicate. We need to build leaders within all levels and across all stakeholders. This necessitates creating opportunities for leaders and also recognising those leaders who don’t fit into the usual structures, for example a shift boss may be a chief, or a head of his church. These individuals are change agents and it’s critical to leverage their potential. As Sheila Khama of the African Development Bank noted during DuPont’s Sustainable Solutions Workshop at the Mining Indaba in February 2014: “I believe that when we speak about sustainable development, we need to contemplate a different kind of leader. Therefore the focus of today’s human capital development efforts should be to create these future leaders.”

Mining is big and profitable, so it’s in everyone’s best interests to grow the industry mindfully and with an enduring focus on national development and shared value; neither of which will be achieved with finger pointing, an ‘us and them’ attitude, or posturing.

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