Deficiencies in mining leadership skills are a global issue built on a lack of strategic vision in the face of various sector trends.

In Canada, Deloitte has flagged an erosion of mining industry experience in mining executive suites.

Cost-cutting efforts in that country have led to greater movement on boards, a talent gap and a resulting lack of sector-specific operational skill sets at the head of mining companies.

The Canucks have responded with mining-focused education programs tailored for executives at a number of universities and business schools.

In the US, these concerns have spawned the South Carolina-based Mine Leadership Training Group, dedicated to upskilling mining bosses, not only in the ways of the industry but in universal leadership basics.

In Australia, we’ve got no shortage of leadership talent at the moment but it’s not necessarily being put to use.

Our leadership skills problems are more firmly rooted in company short-sightedness than uncontrollable economic and social pressures.

Mining-focused people management consulting company Confiance has tied Australia’s leadership woes to a failure to address and rectify the “sins of the past”.

Confiance director Peter Cross says our deceleration out of the big-profit boom days has not been met with a careful rethink of management needs and preparation efforts for the inevitable cyclic rebound.

“The industry has had over two years to address this, it’s not something that has just happened,” he told MiningNewsPremium.

“It’s not about talent identification – it’s about strategic direction that the board should be putting in place.

“We’ve been saying to the industry for two years now that you need to fix these issues around leadership and remuneration, because at a point in time, the industry’s going to turn around.

“It will start to generate revenue, so all these companies need to be ready to take advantage of the turnaround.

“Some organisations have, and some have been much slower than others.”

Cross identified the sins of the past to include the phenomenon of ineffective leaders with hugely inflated salaries adding to the management ranks of mining companies during the heedless days of big money making in recent years.

Cleaning house has been the natural response for companies falling back to earth but the short-term remedies to satisfy shareholders are creating holes in leadership competence.

Confiance general manager Jo Westh cites her survey work as tracking a deficiency in general leadership competencies.

There is no shortage of technical mining-related knowledge and experience but there is a dearth of capability to lead.

“Harnessing the collective ability of the people in your organisation and bringing them on the journey with you are the things not done well in mining companies today,” she said.

“It’s not by beating them over the head with a stick, or just preaching performance criteria like cost savings and revenue generation.

“They need to know how these things can be influenced by them, if they can’t see how their efforts will impact the bottom line, they will not care less.

“It’s about cascading ownership, really getting people committed because they have a stake in what’s going on.

“While mining companies continue to treat people like expendable commodities, there will be no commitment and very little loyalty.

“It’s about engaging them and showing them how their goals and efforts align with the company objectives and linking their reward systems to the outcomes.”

Westh says an imperative to cut costs quickly has led the industry to “toss the baby out with the bathwater”.

“There has been a huge amount of talent tossed onto the scrap heap in the quest to get costs out of the business,” she said.

“This in many businesses has resulted in a significant diminution of leadership talent.

“In some part, we’re paying the price for the skill shortages of a few years ago, when you only had to spell the world leader and you could become one.

“People were promoted above their capabilities into roles that they were ill-equipped to take on.

“In the pursuit of a quick and significant impact on the bottom line to satisfy shareholders, the industry has got rid of many big ticket salaries. Where some of this was necessary, much of it was not.

“There’ve been thousands of years of experience and high-quality management capability tossed out.

“And when the inevitable upturn occurs, so many of these people will be hired back as high price consultants – it’s so short-sighted it’s laughable.”

When observed from a distance, BHP Billiton’s overhaul of executive management last year with the appointment of new boss Andrew Mackenzie and the subsequent changes he made could be seen as an attempt to re-inject more sector-specific know-how into senior positions.

Although a more in-depth analysis will be needed to assess any improvement in leadership skill sets, the mining giant’s rebuild remains an important example for smaller companies that may be hesitant to take the sometimes traumatic leap of reshuffling top leadership.

“It’s a big deal to do this,” Westh said.

“You’ve got to have the guts to actually make the decision to assess your current leadership capability, toss out what’s not working and re-employ people who can take your business into the next generation of mining.

“It’s a major shake-up and now is the time to do it.”