Abu Dhabi InterSearch Grows

After establishing ourselves as the first Executive search firm on Al Maryah Island at Abu Dhabi Global Market, our Abu Dhabi team has grown. We are pleased to announce and welcome both Asel Shilikbayeva and Kumar Chulliparambil to the business.

Asel joins as Principal Consultant, overseeing the Oil & Gas / Energy sectors, and will have a regional focus. She comes with over 12 year’s relevant Oil & Gas experience, and has worked both in-house for large energy companies, as well as on the executive search side in the UK, and UAE. Asel is well networked, and will provide the InterSearch Abu Dhabi office the strength to deliver those ‘hard to fill’ senior roles for both nationals, and expats alike.

‘It is an exciting time for InterSearch Middle East, establishing its presence in Abu Dhabi, and I’m delighted to be part of a great team contributing to its success in the region,’ Asel mentioned.

Kumar has re-joined InterSearch Abu Dhabi as a Senior Research Associate, and comes with over 10 year’s relevant experience to date. We are fortunate to have Kumar onboard, as he was one of the pioneers of InterSearch Abu Dhabi when we previously had an office in the UAE’s capital. For the past 6 years, he has supported the Korn Ferry business, identifying high calibre candidates across an array of sectors locally, regionally and globally.

‘It’s definitely a thrilling time to be re-joining the InterSearch Abu Dhabi business. Being the only executive search firm with a permanent presence here really demonstrates our commitment to our clients and candidates. It’s great to be working for such a progressive organisation,’ said Kumar.

With Abu Dhabi going through somewhat of a transitional period, the landscape is continuously changing. Consolidation seems to be a buzz word in the market these days, however with all this change taking place, it also presents opportunity for those with unique skill sets, to offer value-add to organisations, on many levels. We look forward to continuing to align ourselves with both large and small companies, representing them for their executive search requirements. An exciting time for InterSearch Abu Dhabi.

To view their individual profiles in detail, cliek here: https://intersearchme.com/team/abu-dhabi-team/

Andrew Bailey
General Manager
Email: a.bailey@intersearchme.com

Should you invest in your stars or strugglers?

Some surveys suggest managers spend up to a day each week managing their poorest performers. This is despite receiving only marginal gains in productivity from this group. In uncertain financial times, can you really afford to prioritize your strugglers – or is it better to invest in your stars? According to McKinsey research (Harvard Business Review, 2002), successful organizations focus on attracting and keeping high or ‘A and B’ performers. More importantly, their policies actively push out low or ‘C’ performers; particularly managers who negatively affect team performance.

Read full article here : http://bit.ly/2pwKWhO

This post originally appeared in www.cipd.ae

Life Sciences: An Industry Striving to Meet Ever Changing Global Markets

-by Michael Coughlan

This article discusses the key factors that will continue to reshape the pharmaceutical and medtech marketplace, including the growing power of stakeholders like healthcare payers, providers and patients, and the strategies required to create a marketing and sales model that is fit for the 21st century.

These changes will ensure that products are marketed cost-effectively, create new opportunities and generate greater customer loyalty across the healthcare spectrum. Pricewaterhouse Cooper and Deloitte have released projections on trends to expect for the industry in the future.


Read the full article here: http://bit.ly/2ql6T1t

The 5 Languages of Appreciation in the Workplace: Empowering Organizations by Encouraging People

The 5 Languages of Appreciation in the Workplace, explains in detail the key reasons why persons in the workforce may feel under-valued and consider getting another job. Wanting an increase in income was not the number one reason for many staff members dissatisfaction but there are other factors which may have been overlooked by managers or supervisors.

It clearly highlights the different ways companies and managers reward their staff without being able translates the feeling of appreciation to their staff.The book lists the benefits to be derived by the companies when they clearly understand and implement these tools. Some of the benefits are lower staff turnover, fewer funds required for advertising new vacancies and time required for new staff to learn their functions to become an effective team member.

Buy the book here: http://amzn.to/2qkHJQe

InterSearch Middle East is first international executive search firm to be licensed by Abu Dhabi Global Market

InterSearch Middle East, one of the fastest growing executive search firms in the MEA region, has opened an office on Al Maryah Island in Abu Dhabi – making it the first international executive search firm to be licensed by Abu Dhabi Global Market (ADGM).

InterSearch, one of the original pioneers in the Middle East executive search industry, opened its first office in Dubai in 1998 and established a second office in Muscat in 2007.  The Abu Dhabi office at ADGM will be InterSearch’s third office in the GCC and will complement the existing business well.

Dhaher Bin Dhaher Al Mheiri, CEO of ADGM Registration Authority shared his congratulations with InterSearch.

“Our sincere congratulations to InterSearch Middle East on their successful opening as the first international executive search firm at Abu Dhabi Global Market. We are pleased to support InterSearch’s global aspirations, and we look forward to a strong collaboration and partnership.”

Samantha Robinson, Managing Director of InterSearch Middle East, believes in investing in the markets they service daily, and said that InterSearch’s Abu Dhabi office at ADGM is in an ideal location to provide better support to a variety of Government, Semi-Government & multi-national clients.

Central to our Middle East strategy is being near our clients and candidates, as this further strengthens our ability to collaboratively deliver high quality customer experiences.  Our Abu Dhabi office will be run by Andrew Bailey who has been appointed as General Manager to build a first-class InterSearch practice across the UAE’s capital.  Andrew brings a wealth of executive search experience to InterSearch, having built comparable search businesses that service a multitude of sectors and industries,” said Samantha.

Andrew Bailey, newly appointed General Manager of InterSearch Abu Dhabi, began his career as an accountant, working for large global FMCG firms in Sydney and London, however contracted the entrepreneurial bug and began building businesses for both large and small executive search practices in EMEA, Turkey and Asia Pacific.

This region continues to offer exciting opportunities for executives, and I’m delighted to join one of the region’s leading search firms to identify the best solutions for both clients and candidates. Aligning ourselves with organisations to assist with nationalisation hiring will also demonstrate not only where we add value to our clients, but also add value to the local talent pool” said Andrew.

InterSearch Middle East specialises in executive search within the sectors of Banking & Financial Services, Oil & Gas, Development & Infrastructure, Retail & FMCG, Manufacturing, Logistics & Supply Chain, IT & Telecommunications, Professional Services, as well as Government and semi-Government organisations.

InterSearch Middle East is a key partner for our organization and our multinational clients investing in the MEA region. Thanks to their highly qualified and diversified team of researchers and consultants from all nationalities, InterSearch Middle East can afford an extremely rapid growth without compromising on quality and client orientation” stated Peter Waite, Chairman of InterSearch Worldwide.

With a truly global network, of over 90 offices in more than 50 countries, InterSearch and its team of highly skilled specialists deliver an uncompromised commitment to excellence through their strategic and cooperative approach.

For more information on InterSearch Middle East, visit www.intersearchme.com.


InterSearch Middle East has been recruiting into the Middle East for the last 20 years, having opened head office in Dubai in 1998. Since then, InterSearch has worked with clients in Kuwait, Saudi Arabia, Qatar, Bahrain, Oman, Egypt, Yemen, Iraq and UAE.  InterSearch Middle East is a specialised executive search firm that works across all major industry sectors – recruiting senior and mid-level executives, managers, specialists and professionals in many disciplines. Our current team offers more than seventy-five years of talent acquisition capability and HR knowledge.


InterSearch contact:
Andrew Bailey – General Manager, Abu Dhabi
InterSearch Middle East Limited
E:  a.bailey@intersearchme.com

Media contact:

Andy Abey
Andy Abey Communications
E:  andy@andyabey.com

Digitization expected to create half a million new jobs for Saudis by 2020

Country’s population is the most connected and best educated in its history, says Economist report

Saudi Arabia’s ambitious digitisation plan is expected to play a significant role in creating half a million new jobs by 2020, as part of the country’s National Transformation Programme (NTP).

The aim of the programme is to build a knowledge-based economy in the post-oil era and ease unemployment in the Kingdom, which currently stands at around 11.5 per cent. Forecasts say that the Saudi working-age population will grow by 226,000 annually, reaching 17.9 million by 2025.

A report by The Economist Corporate Network, called ‘Shaping the Future of Work’, states that Saudi Arabia’s population is the most connected and best-educated in Saudi history, and well-prepared for work in a digital environment.

Mina Morris, associate partner at Aon Hewitt Middle East, explained how so many jobs can be created. He said: “In the context of the changing economic landscape for Saudi Arabia, it is important to relate the creation of new jobs in digitisation to the old economic principle of supply and demand.

“The NTP, hich has been sponsored by the highest levels of Saudi government, sets out clear areas where demand will be created by embracing technological changes, such as artificial intelligence, and a more joined-up approach between public and private sectors.”

Even in 2015, the World Economic Forum’s ‘Network Readiness Index’ reported that Saudi Arabia was ranked 35 (out of 143) – as a leader in network readiness in the MENA region.

“In conjunction with this, the government will need to create initiatives designed to create the supply – developing the skills and competencies to enable young Saudis to meet to this digitisation mandate,” said Morris. “This readiness to step into these roles requires a structured development approach, which enables the young population to be ready to perform in a new environment.

“The potential is there – Saudi millennials are reportedly some of the most digitally connected in the region, and this needs to be harnessed in a way that can result in tangible performance in the workplace,” he added.

The SAP Training and Development Institute is among the organisations striving for sustainable work for Saudi millennials. SAP has held more than 350,000 student training days in the past two years, and collaborates with 35 university partners who have trained in excess of 5,400 graduates.

Ahmed Al-Faifi, managing director of Saudi Arabia at SAP, has been quoted in the press as saying “digitisation is the fourth industrial revolution, and the Saudi government has one of the world’s most ambitious plans for using digitisation to boost employment”. Al-Faifi is positive that through partnerships between the public and private sector, as well as with educational institutions, Saudi youth can be trained to work in digital roles, and existing talent can be upskilled.

The private sector is increasingly on board. Last year, Cisco signed a Memorandum of Understanding (MoU) with the Saudi Ministry of Commerce and Investment, which laid out a roadmap for the accelerated pace of digital transformation.

Saudi Telecom Company (STC) is also a major player in the creation of digital jobs. Many roles have been created in the telecom sector as a result of the digital revolution and there will be yet more jobs in IT as Saudis become more connected.

A report in 2016 by the McKinsey Global Institute estimated that the Kingdom’s economic transformation could create six million jobs.

The original article appeared here: http://bit.ly/2nfr4Lo

How Boards advance – and companies with them

By Jakob Stengel, Global Head of Board Practice, InterSearch & Managing Partner InterSearch Denmark


The past year has seen major events – politically as well as business-wise – that only few would have predicted. Across the world, we are witnessing political dogma shifts, greater polarization, technological advancements, business model innovation breakthroughs, geopolitical turbulence, armed conflicts, terrorism, migration streams, artificial intelligence unfolding, climate change rapidly developing, alternative facts and fake news allegations, digitization of services and products, cybercriminals playing a real role in the agenda-setting, etc.

A lot of these developments will be seen as advancements and posing positive implications for a majority. However, another lot of these changes have created and will continue to create an enormous amount of uncertainty and insecurity across most nations and populations. Predictability is deteriorating and expert statements are becoming unreliable.

All in all, we find ourselves in a world less stable influenced by people less reliable. Thus, we are left trying to navigate through an opaque political, societal and economical fog – yet challenged further by a continuous accelerating technological development, implying that not only do we have to assess, plan and act through less transparent conditions but nevertheless try to steer through at increasing speed.

This puts a tremendous pressure on political, public and not least business leaders. They are the ones with the ultimate responsibility for setting course, navigating through hazardous waters and reaching destinations. Some we can look to for inspiration, others will more seek to be inspired themselves. In January and February 2017, we asked around our sizeable global network of chairmen and board members, and we are very proud to have gathered all the findings in our brand new report Global Board Survey 2017 – Advancing Boards.

We dug into how boards are composed, how they work together, how they enhance their effectiveness, how much time they spend, and which tasks they prioritize. We asked them about their look on the future from a societal perspective, from the company’s point of view and in relations to the board’s own development. We investigated where they feel comfortable, and in which areas they could innovate or improve. We looked into their position on various elements of the strategic picture, and on competencies they feel lacking. Or in other words; we investigated how boards advance – and how companies advance with them.


InterSearch – Worldwide Organization of Executive Search Firms and Board Network – The Danish Professional Directors Association together performed the Global Board Survey 2017 in January and February 2017 among 1.017 corporate chairmen and board members from 52 countries on all populated continents.

Respondents represented every imaginable industry, all sizes of companies up to turnovers of more than USD 20 Billion per year, and all kinds of ownership structures.

Some common trends stood out across countries, industries and company size when reviewing the results, and included;

  • Effective board work requires more time spend, both preparatory and at the board meetings and committee meetings, compared to the past.
  • Still more boards perform regular and formal board evaluations; up to 52% of all boards from 47% in our Global Board Survey 2015.
  • Two Megatrends stood out from all others, when asked about which would most significantly impact the society and the economy; one was disruptive and exponential technologies in general, the other was geopolitical instability and political dogma shifts.
  • When asked which board trends that are expected to have the most impact, again two trends stood out; one was transformation focus and digital savviness, the other was more focus on the future of the business, less on compliance/risk/control tasks.
  • Respondents expressed an optimistic and confident view on the economy in the future, with a staggering 68% saying that they expected their company’s financial performance to improve in the coming 2 years compared to the past 2 years.
  • While boardrooms are still heavily populated by men, there is high attention to diversity demands for the future, competency-wise as well as in respect of gender and internationalization. As many as 45% said that increased diversity focus had already impacted how their board is composed. Of those, nearly 2 out of 3 reported that greater gender diversity had been the driver, and 54% said that diversity in competencies had been the aim.
  • Notably, in the same area, half of all respondents expressed that greater gender diversity is definitely to some or a large extent value-adding to any board, and another 31% said that it could potentially be value-adding depending on the situation.
  • When we asked which competencies that should potentially be added to the current board, two competency areas stood out; one was IT / Digitization, and the other (not necessarily far from the first) was Innovation / R&D.
  • As many as 82% of all boards have already had to deal with one or more disruption scenarios, and an overwhelming 92% are planning for having to do so during the next 2 years.

Doing things right, by doing the right things

Historically, most boards have kept their primary focus on the Governance, Risk and Control agenda, but boards of tomorrow will attend much more to future of the business, heading transformations and steering towards a sustainable business model. We see increased time spend on strategy, customers, innovation and stakeholder management, albeit there is a broad expectation of increasing regulation and governmental control.

Today’s boards also recognize that for the business to survive tomorrow, the fundamental business principles need to be long-term sustainable. Globalization has meant that no one – not even the Apples, the Unilevers, the VWs, the TATAs, the LEGOs, the Shells, the HSBCs, the Huaweis, the Coca-Colas, the Samsungs, the Pfizers, the Canons, or the Facebooks of the world –  can feel certain in a market leader position, as competition is agile and due to a global geographical span very difficult to keep under surveillance.

In the good old days, size was the predominant factor to determine a market leader. Today, agility is the key. However, that shouldn’t leave the big players in complete despair. They too can act agile, but in addition to constant and continuous innovation one more factor will be key if they want to stay in the game; adhering to proper quality delivered in decency and orderliness, ie. with a sustainability pillar underneath it all. Look to VWs Diesel-gate, Apple’s tax fine from the EU, Google’s fine for anti-competitive practices also from the EU, Olympus’ accounting fraud, RBS’ mis-selling scandal in the US, and many other examples of companies that despite numerous control mechanisms and all the right company values written down, they can still suffer tremendously from the hard-hitting reality when ethical (and legal) wrongdoings suddenly surface.

Recommendations to the Boards on ‘Advancing Boards’

Based on this year’s Global Board Survey 2017, and adding to that our vast experience from working with some of the world’s most influential board members from some of the world’s largest companies, we have been able to identify ten characteristics that Advancing Boards have in common;

  1. First and foremost, they are courageous. They have courage to think in new ways, to challenge status quo, to try new things, to speak out their mind, voice their concerns, share their experience.
  1. They lead. They know that the Tone at the Top is set by the very top; the board – and they accept the responsibility that comes with that.
  1. They continuously prepare for the future and do not rely on achievements and glory from the past. They personally observe Megatrends and customer behaviour patterns, all while ensuring to support initiatives that have the potential to disrupt the competition instead of themselves becoming obsolete.
  1. They engage fully. Advancing Board members do not accept positions that they can not devote enough time to. They know that the company is dependent on them.
  1. They do not rely on gut feeling when making strategic decisions, but make sure that the strategic vision, engagement and alignment rely on evidence, facts and data.
  1. They are all for diversity. Vigilance, innovation, adaptability, risk management, agility and transformations are all areas that are better supported by heterogeneity in competencies and mindsets rather than by homogeneity, hence also better supported by diversity in nationality, age, gender etc.
  1. They act timely by being well prepared, showing decisiveness, making changes when needed, without hesitation – also when it comes to changing the CEO.
  1. They exhibit integrity. The do what they say, and say what they do, and remember that sustainability is not about meaningless philanthropy, but more so about staying in business for the long term.
  1. They undergo regular and formal board evaluations, taking their own medicine in relations to measuring performance. Yearly they evaluate the competencies, inter-dynamics and effectiveness on the board.
  1. They remember why they were originally appointed to the board. It was originally all about shareholders believing they could add value. Knowing their company and trade. And they are adding that value – to the board, the company and the shareholders.


Key here is the acknowledgement that relentless change, ferocious competition, unstoppable innovation and global turbulence are all trends that are here to stay. Radical innovation and exponential organizations will continue to challenge today’s market leaders. As already stated elsewhere, we have no doubt that companies looking to advance need to rely on Advancing Boards. We urge you as chairs and board members to continuously strive for a momentum of advancement and will end of with words of encouragement from the late founder of Apple, Steve Jobs:

‘Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them. Because they change things… They push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.’

To read the full report and InterSearch’s press release on the report, please go to: http://intersearch.org/news/86-news-and-press-releases/316-advancing-boards-global-board-survey-2017-results-how-boards-advance-–-and-companies-with-them

The Kingdom Comes Together

By Nicholas Harvey, Regional Director – InterSearch Middle East

On a recent visit to the Kingdom (of Saudi Arabia), my Chairman and I were sat in the departure lounge reviewing the pros and cons of the trip.  As I wrote in an earlier article, the country is facing a number of unprecedented challenges from a number of fronts including the current modest oil price, military conflicts in Yemen, Syria and Iraq, as well as funding earlier over-zealous spending commitments.  Moreover, significant payment delays on public-sector projects has had a considerable knock-on effect to private businesses, many of whom have been forced to make radical cuts of resources and to budgets.

However, the response from the country’s leaders has been encouraging.  In a nation famously guarded, they have openly highlighted the fact that the days of heavily subsidized utilities are numbered and that it will be the Saudi people who can lead their country into its next chapter echoing sentiments from JFK’s famous line “..ask not what your country can do for you, as what you can do for your country..” (or perhaps alluding to Churchill’s promise of “..nothing to offer but blood, toil, tears and sweat”!).  Well, not quite.  With sizeable foreign reserves, billions in US bond and a huge war chest, things haven’t quite reached crisis point – however, a strong response is being delivered in the shape of the National Transformation plan, now in its second year.

What both my Chairman and I did agreed upon, is that the Vision 2030 has successfully reached the forefront of intentions within the office space in the country, both in the public and private sector.  Typically, the GCC Arabs are an extremely patriotic bunch and coupled with a very persuasive Government/Royal Family we have seen an unprecedented shift of Saudis moving from the Private sector into the realm of ministerial or advisory positions with the Government.
Moreover, even those not directly employed – are being sought out to assist in the implementation and development of key objectives in the National Transformation Plan – e.g. The Job Creation and Unemployment Control Authority.  One of the differing factors from the earlier National objectives in the current Transformation Plan has been the way the private sector has been engaged.  Earlier efforts have faced criticism that policies (whilst robust in theory) haven’t succeeded to their desired extents through ineffectual implementation.

On interviewing a number of leading Saudi Executives, all agreed that there has been a clear policy to engage the private sector to help roll-out a number of these key objectives.  Transforming successful businessmen into the civil service isn’t of course an entirely new concept.  One of the key drivers of the current Transformation plan, HE Eng. Adel Fakeih, is the former Chairman of Savola, before becoming the Mayor of Jeddah and is now having considerable impact as the Minister of Economy & Planning.

However, it was of great interest to hear about the number of ‘think tanks’ and committees that have been set up to utilize the practical know-how of those leaders in the real working world (as opposed to that of theorists and pure academics).  One such example of this highlighted to me by the current CHRO (Chief Human Resources Officer) of large family group in Jeddah is that of women in the workplace.

Contrary to some of the views in the western-world, Saudi women are permitted to work.  However, the fact is that of the Kingdom’s unemployed, nearly 80% of the total are women, pointing to significant barriers to entry into the workplace.  The CHRO and others have been asked to inquire what is keeping so many women from the workplace and the results have surprised some.  Many (including myself) assumed that age-old conservative stigma or the lack of infrastructure in the office would be primarily to blame.  It is however, the cost and difficulty of transportation that came out as the biggest obstacle for woman taking up junior positions.

Coming in at an entry level position, graduates often earn just SAR3,000 – SAR5,000 ($800-1,300) per month and the cost of getting a driver every day coming in at around half that sum (as of now, there isn’t really an adequate public transport system in most Saudi towns and cities) it simply doesn’t make economic sense to work.  Naturally, this barrier to entry will prevent women gaining a career and climbing up the ladder.  Think-tanks are now evaluating alternatives, such as working from home or the cost of providing company transport.

Not all are celebrating the benefits indeed – whilst many see the positives of bringing more commercially minded individuals (with some may say) a stronger work-ethic – others argue that this ‘transformation’ has led to an exodus of seasoned bureaucrats and senior civil servants who knew how to administer Government.  i.e. it’s all very well bringing in new blood to fuel drive and energy, but without the seasoned guides there is a danger that the efforts will be confused or misdirected.

One benefit of the ‘job for life’ scenario previously seen in Government is that the Ministers/ Under Secretaries really got to know their department, framework, structure etc… Much of that know-how could therefore, be in jeopardy.  Others argue, that Government officials are still in the post and that the influx of numerous advisors and ‘experts’ from the private sector has simply doubled or added to the wage bill.  Those that have suffered under incompetent (bureaucratic-ridden) for long periods will counter that it’s high time the whole public sector went through a shake up (better an internal than external revolution) regardless of a bit of pain.

Most agree that moving forward reforms, not just within Job Creation, by also the Energy Reform and Fiscal Reforms the challenge will be on the delivery.  Presently the population appear to be supportive; however moving forward, it is likely there will be anxiety amongst the people on how the changes will impact them and the money in their pocket.  It is incongruous to suggest that the delivery will be linear, however, what has been consistent, to date, is the messaging.

One over-riding observation from the trip was the sense of an almost confucionist unity on achieving these united goals.  In every meeting, Vision 2030 or National Transformation Plan was at the forefront of most conversations and the Government can heap praise on itself for driving this vision to the minds of all.

Opportunities in the current uncertain market

-by John Robinson, Chairman – InterSearch Middle East

The current volatile and cyclical oil price has negatively affected the economic climate throughout the whole of the Middle East, especially in those GCC countries that have significant oil reserves. Capital expenditure has slowed or been delayed, budgets are being reduced and the revenue and subsidy structure of most states is being drastically reorganized.

On the face of it, perhaps not a good time to be expanding your business or acquiring other businesses; too risky. Well, in InterSearch Middle East we are doing just that and we are confident that our business expansion in this current climate is actually less risky now than waiting for a market upturn. We recently opened a new office in Abu Dhabi to complement our offices in Dubai and Muscat, and plans are well advanced for opening another office in Riyadh later this year.

Are we crazy? Maybe, but in our business plan we took account of the following:

  1. The initial capital expenditure and the built in fixed costs are reduced. Rents are lower, costs are lower and better deals can be made. Given that we are planning on, say, a 10 year horizon then we can build in cost advantages for that period.
  2. Top quality people are more available. As our competitors downsize or withdraw from the region we are able to attract and hire proven performers to join our expanding and confident business. We recently hired two top performing guys in Muscat and three in Abu Dhabi, all from our direct competitors.
  3. Our clients appreciate that we are sticking by them in difficult times and we are demonstrating our confidence in them and their market in the clearest possible way, with our cheque book.
  4. When the market upturn comes InterSearch will be in a much better position to fully take advantage of that, with a well established business already on the ground and a top performing team working closely with our clients.

Crazy? Maybe. Ask me in 5 years.

Multiple Threats in Mining: Limit these with the best commercial and technical management team

– by Cheryl Zeghers, Principal Consultant – InterSearch Oman

The driving force behind what used to be Africa’s most advanced and richest economy, South Africa, was the mining industry. Lesson’s to be learnt.

Today South Africa is still the world’s richest nation in commodity wealth with mineral reserves estimated at USD2.5 trillion. Twenty five percent of the economy can be attributed to mining.  Mining started in 1867 with the discovery of diamonds and in 1886 in the Johannesburg area with the Witwatersrand gold rush. Today South Africa is the world’s largest producer of chrome, manganese, platinum and vanadium and the second largest producer of ilmenite, palladium, rutile and zirconium.  South Africa is also the world’s 3rd largest producer of coal and a major producer of iron ore.

Today there are several challenges facing the South African Mining industry:

  • Labour
  • Rising costs
  • Political uncertainty and subsequently policy uncertainty
  • Unreliable sources of power
  • A long cycle of reduced global demand (China is South Africa’s largest trading partner in commodities)
  • Ongoing human rights issues
  • Allegations of corruption
  • What is known as the “Brain Drain” caused by skilled people leaving the country and a subsequent serious skills shortage

The governments of the Middle East are actively exploring various mining ventures as a way to diversify and boost economies. Investors do not start projects like these with an intention to fail. However, refineries burn, bridges collapse, pipelines burst and the best strategies are defeated.

The main contributor to project failure are known to be human factors. Take this in combination with the various other threats to the success of mining projects (see below) and it’s no wonder investors are nervous:

  • Lack of funding
  • Fluctuating commodity prices
  • Currency fluctuation
  • Taxes
  • Regulations
  • Delays in government approvals
  • Community opposition to projects
  • Health and safety
  • Environmental
  • Expertise
  • Semi- skilled and unskilled Labour problems
  • Security
  • Political
  • Equipment
  • Power & Water resources
  • Logistics

It is widely accepted that managerial matters are the reason for 92% of failed projects. It is essential to match competency guidelines with the exact technical and commercial expertise required so that there is alignment with a specific project.

The correct management team will convince investors and create trust in the project. Investors look for management teams with solid track records, the correct skill set, a proven ability to deliver, alignment with shareholders and a solid risk management strategy in place. A bad management team can take a good resource and destroy it.

Trust equals Investment. This means trust that resources will be allocated effectively. Trust that disreputable parts of the industry have been screened out. Trust that there is financial literacy; strong strategic understanding and world-class technical skills.

Even mining giants like Rio Tinto can make mistakes but they focus on the largest and best deposits. They also retain full management control of their projects and have the best regional strength and local knowledge in place. Rio Tinto also makes sure they have world leading commercial expertise, and the very best in project management, geology and mining.

It is imperative that an employer understands whether they need a generalist or a specialist. Different project phases (e.g. exploration; pre-feasibility/ feasibility, mine planning, funding, development and building, operations) require different skills sets from experts. It is also essential to match the skill to the specific resource whether it be a metallic mineral (copper, chrome, laterite or manganese) or an industrial mineral or rock. The specific proposed mining method whether it be underground or open cast is also an important consideration.

In conclusion, the best way to limit many of the multiple threats in new mining projects is to not only focus on the right deposits but also have the very best possible management team in place. Short cuts in either of these areas could well lead to failure.