Building a Digital Gold Mining StartUp
With Peter, a FIRMSconsulting Case Coaching Alum, and his family, we will help them take over a decommissioned, lower-yield gold mine and bring it on stream to profitability by using a digital process to engage the workforce to increase profitability.
This will require significant implementation skills.
Mining is a tough, messy and unforgiving business.
Rolling out a digital strategy is a lot harder with an illiterate workforce.
We will deploy an unusual business model to run a mine long abandoned for its low yields.
This is the 3rd business we are co-founding to demonstrate how a strategy partners’ thinking would guide a start-up. Yet, unlike the Luxury Brands Digital Start-Up with Tati, or the Electric Car Start Up with Peter, this is an old-school industry where we will be deploying significant digital capabilities to wring out efficiencies in a highly labor intensive sector.
All programs teach valuable lessons that we do not repeat. So you should watch them all.
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We will capture all our steps, insights, analyses and lessons and you can follow us along. Our goal is to teach you to think the way ex-strategy partners do, introduce you to advanced problem solving skills and teach you how to build a business, or work inside a high-tech business in a brutally competitive space.
You will see the process is disciplined in its thinking, but messier than a consulting engagement.
Deep in a thriving emerging markets economy, we are partnering with a client’s family to take over and bring on-stream a decommissioned gold mine. Like the Electric Car Startup, Building an Innovation Practice and the Digital Luxury Brands Atelier, you can follow the entire journey via detailed episodes outlining the entire process: every meeting, every challenge, every tactic, every obstacle, the finances and the implementation of our strategy.
This is one of 4 businesses we co-own and are co-developing with clients to teach you, our loyal and valued Insiders, how it can be done.
Mining is a tough business requiring critical decisions that are hard to reverse. Should the mine be mechanized or mined with a labor-intensive process? Mines are typically in under-developed parts of the world so the miner must decide what role to play in developing the local community. Should it play a role?
Implementation, for those of you following our McKinsey Implementation Program, requires teaching workers the tools to identify and roll out changes to the business. We will have to figure out a way to empower a workforce that is largely illiterate, lacking in basic services like healthcare and operating under harsh conditions.
How do we strike a balance between enabling a humane working environment and the reality of a very harsh operating theater where fatalities are a common occurrence? Do we merely obey local rules and regulations or hold ourselves to higher and costly western standards?
Do we make the common mistake of merely mining the gold and sending it to foreign countries for refining and beneficiation? The latter being the step where the most value is created in using gold within advanced products like memory chips and equipment for the space program.
Can we do all of this and still make a profit? Find out if we can.
Most digital strategies rely on a highly educated labor-force to understand and use digital technologies. We will be using digital capabilities in a different way. We have to find a way to help and support a labor force which has close to 90% illiteracy and create smart digital solutions to empower them, motivate them and support them as they pursue an ambitious plan to bring the mine online.
A mine that has long ago been abandoned due to his low yields and increasing fatalities.
The digital solutions will not be rolled out in nice air-conditioned offices with easy access to the IT team if a server fails or an App breaks down. The crew will be deep underground working under extremely challenging conditions at high temperatures, dust, moisture, deafening sound, and incredibly high risks. Taking out one’s phone to use an App one cannot read and understand, that fails to load or takes too long to load can lead to fatalities.
This brings a whole new dimension to a digital strategy.
It would be a good idea to watch this program to gain a sense of the implementation challenges we will face: https://www.strategytraining.com/implementing-an-operations-strategy
Disclosure: When we admit clients to this program, Firmsconsulting assumes a controlling equity stake in the business, though we are not investors.
We work with ex-partners of McKinsey, BCG et al to teach you critical thinking, strategy, operations, and implementation skills. We teach you how to apply their skills. We teach you to apply those skills within case interviews. We teach you how to apply those skills to solve complex consulting assignments. We teach you how to apply those partner skills to transform your career. These startup programs continue the theme of teaching you to apply the analytic and problem-solving skills of partners to set up and build businesses, be it a startup or building an existing business within a large company. We are always teaching you to apply those skills.
Part 1, The Opportunity
1 GMS P1 What is the Gold Miner Start-Up?
2 GMS P1 Introducing Peter and his fears.
3 GMS P1 How does this link to the MasterPlan Program
4 GMS P1 Mapping out the overall strategy
5 GMS P1 How do you implement through illiterate workers?
6 GMS P1 Why this program is just as relevant to those only interested in the strategy skills of partners or don’t care about mining
7 GMS P1 Peter’s greatest challenge is not what you think it is
8 GMS P1 All the governance problems
9 GMS P1 Why we are against mechanization
10 GMS P1 Issues in emerging markets
11 GMS P1 Can we build a business model to mitigate the risks?
12 GMS P1 The right attitude to do this kind of work
13 GMS P1 Michael, aren’t you too old for this work?
14 GMS P1 Gold mining is a cruel joke on humanity
15 GMS P1 A digital strategy when 90% of the workers are illiterate
16 GMS P1 Why is this a startup and not a normal gold miner?
17 GMS P1 New dimension of value- collective responsibility is not about being nice
18 GMS P1 I was a resources partner, not a resources expert
19 GMS P1 The unique advantages that YOU have, that YOU routinely ignore
Part 2, Developing the Strategy
20 2.1 GMS P2 How we developed the strategy- follow us
21 2.2 GMS P2 Step 1- Be crystal clear about what you want
22 2.3 GMS P2 Step 2 – Eliminate the next best option
23 2.4 GMS P2 Go ahead. Make a decision on the strategy
24 2.5 GMS P2 Compare your problem statement with the new problem statement
25 2.6 GMS P2 Big change difference in our strategy. Learning from a famous tech start-up
26 2.7 GMS P2 A new way to run a mine
27 2.8 GMS P2 Can this work? Always make sure it can work
28 2.9 GMS P2 Why not build a decision tree and use the usual language?
29 2.10 GMS P2 What is our asset? How would you value us?
30 2.11 GMS P2 Charitable actions are the easy way out for a company
Part 3, The Challenges We Will Face
31 3.1 GMS P3 Managing the family dynamics
32 3.2 GMS P3 Aligning goals and expectations with all stakeholders
33 3.3 GMS P3 Working through Peter
34 3.4 GMS P3 Changing the families view of the business
35 3.5 GMS P3 How to properly negotiate