The frenetic pace of change being brought upon us is creating the new normal. In our recent past, change often felt like an event. Today, it feels relentless.
The rate of technology advancement is eyewatering. Its impact is being felt everywhere and understood almost nowhere.
Climate change is real and accelerating, and whilst for now some are being affected far greater than others, everyone is affected. Socio-political change is flaring everywhere. From Trump to Brexit, Hong Kong to Kashmir.
Adjusting To The New Normal
Developing a fit, resilient attitude to this new normal will create opportunities for the entrepreneurial mind and industrious aptitude.
In fact, if this is you, you should be thankful. Stability prevents innovation, quashes opportunity, and stifles the entry of new players into the economy.
Rustenburg, located in South Africa’s Northwest Province, is the locus of the global platinum industry.
A five-month long strike at the beginning of 2013 brought the world’s most prolific and deepest platinum mines to a halt.
A highly complex mix of socio-political and commercial issues had led to the Marikana massacre in August the year before where 34 miners were gunned down by the South African Police. It left an indelible scar on South Africa’s psyche.
A Broken System
Two years before Marikana, I met Themba. In his mid-forties with a long and accelerating career in the world’s largest mining companies.
Educated, smart, capable, and action orientated, Themba headed up procurement for wastewater pumping. It works like this: the deeper you dig a mine; the more water comes into the cavity.
Eliminating the water is critical to the ongoing mining process. Should you fail to do so, the mine effectively floods, preventing any mining activity taking place, and destroying the infrastructure of the underground mine itself.
He was frustrated. For years he bemoaned the break-fix model of pump maintenance. It was as old as the mining sector itself, and it was a broken, costly model for the mines.
He explained, “a pump stops pumping, and then the shift manager phones the pump guy. He arrives with his truck and a brand-new pump. He replaces the ‘broken pump’ and bills the mine.
He then replaces the ball bearing in the ‘broken pump’ and sells it into industry making twice what we paid for the new pump. It is madness, but shaft managers are incentivised to mine, and not focus on pump costs!”
Challenging The Players
He had decided to leave corporate life and start his own business. He would challenge the incumbent players, many of which were plus 30 years in existence. I asked why he thought he would succeed.
He showed me an MBA project report he had completed that pointed out the inefficiencies of the break-fix model. He could do it better, he argued.
He had deep understanding of the problem, knew his competitors, their solutions, and pricing as a former procurement head, and he had savings plus the promise of backing.
Those make for a nice start, but I was dubious. Nothing he had said made him any different to what was already in the industry.
The New Game
I met Themba again during the mining strike early in 2013. He was distressed. Business was tougher than he had anticipated, and the competitor response to his entry into the market far more vicious than he had expected.
His savings were depleting, and all the promises of support from suppliers and customers that were made whilst he was head of procurement in the biggest mining house in the world, vanished the moment he left his powerful corporate position.
He bemoaned the state of the mining sector, and his ill-timed entry into it. I waited patiently for him to vent his pity-party, which he did, asking what I could do to help.
“The game has changed, create new rules, Themba,” I responded. We visited three mines in the region. All were closed, and, in all cases, we were received by austere executives.
The message was unanimous: there is no capital budget, retrenchments continue, and all current suppliers have been instructed to reduce their already tight pricing by another 15%.
That was the new game – water-elimination was critical, and there was no money to buy the service, plus skills were leaving the sector.
Problems Are Precious
We set about building a solution to this new set of problems. It took the shape of a smart wastewater–elimination system. Themba bought the pumps, pipes, and valves off the mines’ balance sheet.
We developed devices to measure the rate of wastewater elimination, devices to measure the turbulence in the pump line, and more devices to measure the vibrational quotient of the pumps themselves.
From a screen, Themba could see which pipes and valves were working efficiently, and which pumps required predictive maintenance.
We devised a new billing model, charging the mine per hectolitre of water pumped. Competitors deeply invested in the break-fix servicing framework were left in deep water, unable to respond.
Their vested interests, long relationships with now retrenched employees, and fixed way of doing things prevented it. You see, the game had changed, and Themba had changed the rules for the new game.
Problems are precious to those who embrace them as part of the new reality. They are here, they are growing, and in the turbulent confluence of problems that now govern everyday life, are enviable opportunities for entrepreneurial, industrious people.
Words by Pavlo Phitidis
