Constructing a work ethic
When Sam Walsh became CEO of Rio Tinto in January 2013, he was charged with moving the company forward following a humbling 2012, which saw the demise of his predecessor, Tom Albanese, after company write-downs of US$22 billion in two years.
From the outset, Walsh was clear that he wanted all employees to act as owners of Rio Tinto, making decisions they would make if they owned the business. It is this mindset that Hugo Bague, group executive of organisational resources, has been tasked with overseeing over the past two years.
“We had a health problem with the company [when Walsh joined],” admits Bague. “We had to restore the balance sheet, drive for results, and create real value for shareholders – we knew we couldn’t just do that by putting hard metrics in place, to create sustainable value we had to work on the culture too. It’s an easy thing to say but for it to be authentic, you need to translate what this means to every employee.”
Creating value through people
Having started his working life in his native Belgium as a teacher, Bague identified a love of people, which led him to learning and development and subsequently HR to “broaden [his] perspective”. During his career, Bague has worked for organisations including Compaq Computers, Nortel Networks and Abbott Laboratories. Most recently he was global vice-president, human resources at Hewlett-Packard, based in the US.
Bague was appointed to his current position of group executive, organisational resources in 2013 after joining Rio Tinto as global head of human resources in 2007. As well as HR responsibilities, Bague oversees health and safety, environment, communications, IT, procurement, shared services and group property. “It’s an unusual title for an HR guy,” laughs Bague, as we sit in the organisation’s head office in Paddington, London. “But I think many HR people often fall into the trap of looking at HR as the ‘people’ component with not enough of the ‘organisational’ component – I changed the title to people and organisation because it’s so much broader than people.
“I’m looking at how people interact, cultural components, operational components and how HR can work on the transformative elements of the organisation to bring it together.”
Putting safety at the heart of business
Bague explains that Walsh’s appointment as CEO prompted a re-think of the strategic priorities of the business, which resulted in identifying ‘safety’ at the heart. But while the organisation had always cared about people deeply (which Bague reveals was a huge attraction for him in joining the company), it had historically employed a systemic, process-led approach to safety and struggled with the human component.
“Whether we like it or not, this is a dangerous industry that can harm people, and we need to do whatever is possible to prevent that,” he declares. “We have a responsibility to ensure workers go home in the same state as they started their shift. Our goal is zero harm.”
The recent Ebola outbreak in Guinea, west Africa – where Rio Tinto owns a share of the Simandou iron ore deposit and has thousands of employees – brought this to the fore. While operations in this area usually involve building roads, rail and perhaps schools for developing communities, Rio Tinto has become a quasi-provider of healthcare and hygiene education. “It’s not just about caring for employees but also their families and the communities they are part of. In instances like this, we need to establish what our role is as an organisation in a country with a big issue,” says Bague.
Responding to the outbreak, a Rio Tinto Business Resilience Team was established and control measures implemented with the Guinean government, World Health Organisation (WHO) and other international organisations. As well as donating $200,000 to the WHO’s work in the area, Rio Tinto has organised and conducted prevention and awareness campaigns, distributed hygiene kits, supported hospitals with protective equipment and medical supplies, and helped communities with raising awareness and providing food.
From an employee perspective, the objective is not now mining at Simandou, but the survival of its workers in the developing nation. Prevention measures have been put in place for staff and Guinean communities. Where possible, operations and unnecessary travel have been reduced in the area, and extreme precautions taken where employees are on the ground. “We’ve put the business on slow burn as the most important thing is that our employees and their families feel cared for,” adds Bague.
Shifting skill sets
Operating in remote, often dangerous areas means the organisation faces problems when attracting talent. “As a mining company, we need to go where the assets are – and you don’t find those in the centre of London or New York, they’re in remote locations,” reveals Bague, adding that emerging talent usually wants to live and work in an urban environment, so making remote sites attractive can be difficult.
Rather than seeing this as a problem, Bague believes this enables Rio Tinto to come up with new ways of managing the workforce – a prospect he is excited by. “I love having discussions around new workforce models and how that will lead to changes in the workforce, in the midand long-term,” he says.
One way Bague anticipates the workforce changing is through automation – and in Perth, Australia, for example, Rio Tinto has driverless trains in its mines. “Often people translate this as simply an effort to reduce cost,” he says. “Yes, that’s important but you need to look at the root cause of these costs – it’s almost impossible to get people to those remote locations. Instead of having a truck driver at a mine 2,000km away from their home, if we can hire people to oversee not one, but several, trucks from a distance, this will reduce risk, improve safety and create a more efficient operation.”
As a result of this shift towards automation, Bague anticipates the skills Rio Tinto requires in the future will alter dramatically. “We didn’t typically have robotic skills in mining, but we need these going forward, so there’s a whole area of different skill sets to tap into and develop,” he says.
When it comes to workforce planning, Bague is clear that a short-term approach is no longer sufficient for a business operating in such a fast-changing context, so his team is working on establishing a predictive talent model looking not only at current demands but also future supply.
“Establishing a pipeline based on current talent needs is useless. They will change dramatically in the next five to 10 years, so we need to get in front of that and ensure we develop talent for what we need today, but also tomorrow.”
Regarding changing workforce demographics, however, Bague is less concerned about the concept of an ‘ageing workforce’ and more about the ability of his workforce to be engaged. “We have people working for us who are 70 years old – you wouldn’t believe their dedication and enthusiasm. You could have a 30 year old working for you who doesn’t know why they are there. It’s not about age, but passion.
“Recently we had a guy who retired at 74 after working for us as a truck driver for 50 years. You can say ‘how can someone do that job for 50 years?’ – it’s passion. This man was so passionate about what he was doing and the company, that he didn’t want to retire. He came to work every day with love and passion and dedication. That’s what we need to drive for with every employee.”
Giving local leaders a sense of ownership
Over the past two years much focus has been placed on overhauling Rio Tinto’s culture to concentrate more on local ownership. “Wherever we operate, local people should be running those businesses where possible, not just Westerners,” suggests Bague. Rather than rolling out the business strategy in an homogenous way across the globe, Rio Tinto empowers local leaders to translate this to be suitable for their own sites, assets and businesses.
Having the freedom to translate strategy to suit local cultures is crucial for Bague, who believes it helps create ownership, which in turn drives engagement – resulting in increased productivity and ultimately greater value for shareholders.
The organisation’s core values – of respect, integrity, teamwork and accountability – all sit under the overarching theme of safety. For Bague, each value needs to be translated locally, and regular discussions are held around the values in-country to identify what they mean in each Rio Tinto region. Bague believes this helps to prevent them from being “words on a wall that no one can identify with”. They also form part of the performance management process, and the annual engagement survey asks for feedback on how values are perceived and lived through the business. “We attribute a lot of importance around that so they are not hollow words,” he says.
But Bague adds that there is also a direct correlation between engagement and safety. “Where we have highest engagement scores, we have the best safety record. It might sound intuitive, but we know driving engagement and empowerment is important from a financial perspective but from a safety perspective too.”
Planning for a gender-diverse future
To empower local teams, a major focus for Bague this year is developing national talent to take on leadership roles in-country. There has been significant progress made on this, as 30% of the organisation’s 2013 graduate intake were nationals from regions where Rio Tinto is developing new businesses. And throughout 2013, Rio Tinto was the largest private-sector employer of indigenous Australians, who represented approximately 7.5% of the Australian workforce.
Gender diversity is also high on the agenda, including a broader representation of women in the workforce, and it is hoped they will comprise 20% of senior management by the end of 2015.
“We’ve definitely made progress, but there is a strong belief that we are not as diverse as we should be, as a global company,” admits Bague. “We shouldn’t drive
diversity for the sake of it, but if you are really inclusive and diverse, you broaden your talent pool and it’s only beneficial.”
While Bague acknowledges that diversity issues are not unique to Rio Tinto as an organisation but the mining industry as a whole, he believes the company has a responsibility to raise awareness of what a career in mining can involve.
“The image of mining is still one of people with shovels,” he says. “Some roles are amazing in our business but people think mining is a dirty industry. We do so much community work and the breadth of opportunity in the business is hugely exciting.
“But I always say that if Rio Tinto was a sushi company, we would call it ‘That Cold Fish’. Miners are down-toearth people, and call a spade a spade. Sometimes that’s not to our own benefit – we need to be proud about the good things we do – there’s a lot in this industry,” he smiles.