posted 28 Aug 2003 in Volume 7 Issue 1
Case study: De Beers mines for knowledge gems
Knowledge management has helped De Beers face its competitive market by drawing on the value of over 100 years’ worth of knowledge and experience. Ian Corbett and Nick Milton were tasked with the challenge of capitalising on the company’s intellectual capital. They reveal how they took the KM concept and embedded it into organisational processes.
July 2002, Johannesburg, South Africa:
In the hushed auditorium, Nicky Oppenheimer, chairman of the world’s leading producer and seller of rough diamonds, is updating senior management of the group’s Exploration and Operations Division at the strategic review following the leveraged buy-out and privatisation of the company. For the first time, the organisation’s intellectual assets are on the agenda. “Sharing knowledge: we have to be and are committed to fulfilling this.”
While this meeting was taking place, knowledge management was truly under way within De Beers. Several hundred kilometres away at Finsch mine, Bruce Emerton, the mine’s knowledge manager, was working on a way to re-use financial-savings knowledge. The metallurgy community was beginning to exchange knowledge using their new online system. The explorers were planning their knowledge-management training and community-building event. Knowledge was being captured and re-used in De Beers Marine, De Beers Canada and Premier Mine. Oppenheimer was right: De Beers was committed to becoming a knowledge-enabled organisation; the journey was well under way.
The De Beers background
These are times of great change for De Beers. From being an old-style hierarchical organisation based almost entirely in southern Africa, with few competitors in the world diamond market, De Beers is now expanding internationally, facing increasing competition, and the need to address public concerns over sustainable development and conflict diamonds (the sale of diamonds from warring nations, which could potentially be used to fund conflict). The change was highlighted in 2001 by a leveraged buy-out of De Beers, transforming it from a public company to a privately owned one, while retaining and building on the aspiration to be the world’s leading diamond company.
In the 21st century, De Beers can no longer rely solely on size or market dominance for success, especially when competing in new countries. Instead it needs to draw on its more enduring asset – its vast wealth of knowledge and experience developed over 100 years of diamond mining in a wide variety of operational environments. However, those gems of knowledge are scattered around the organisation, in the archives and files, and in the heads of the skilled and experienced employees. Hence the need for knowledge management. For the company to shine in new settings it would need to seek out and extract the gems of knowledge, shape and polish them, and market them to where they can be used and applied with pride.
The early stages – seeking a concept
When Ian Corbett was first tasked with investigating how De Beers could better leverage its intellectual capital in January 2000, the change process in De Beers was well underway. The organisation was involved in implementing many initiatives following the first phase of the strategic-review process. Searching for ways to positively contribute to the organisation’s future capability consistently brought Corbett back to the people in De Beers – a culturally diverse resource of diamond knowledge and experience built up over a century of mining some of the most exciting diamond deposits discovered in the world to date. But how well were people linked? Did a lattice run through the geographically dispersed organisation to impart great strength by:
- Making learning gained by one site available to other sites that needed it?
- Connecting people with common interests and roles?
- Locating critical expertise and experience when it was needed?
Issues such as these were not being addressed systematically by other initiatives. There was an opportunity to look into how well the organisation was learning in order to deliver the promise of future performance. The question was, how were other organisations meeting these challenges and could De Beers learn from them? Corbett went back to his roots in the research environment to find out.
Corbett’s intuition told him that De Beers was realising a fraction of the value that was potentially available because learning was not flowing freely through the organisation. He knew that the answer lay in engaging the entire workforce, but he also knew that technology was not the answer – it could only help. Corbett spent some time discussing the situation with Janine Nahapiet in Templeton College and became convinced that the answer lay in creating an environment for conversation – in the frenetic pace of change, people were losing the time to reflect and discuss what they had learnt. He read the business literature on intellectual capital and knowledge management and examined the experiences of other organisations. Corbett liked what he read about the work being undertaken in BP, as it made intuitive sense to him. Then one day the phone rang. Nick Milton had just introduced Paul Bosma, a young geologist studying knowledge management for his MBA at the University of Cape Town, to a case study. Corbett read the study and within a day, Thea Rutherford in the Information Centre at De Beers Marine had his contact details.
Corbett remembers the first conversation with Milton really well. Apart from sharing the same geological background, they discovered that issues facing De Beers were remarkably similar to those in BP in the early to mid-1990s in terms of knowledge transfer and organisational learning. It was an exciting moment for Corbett as he knew he had just hit on the solution.
December 2001 – the start of the trek
With the benefit of hindsight, December 2001 can be seen as the start of a co-ordinated knowledge-management effort across the whole of De Beers. Corbett hosted a workshop for 20 knowledge-management enthusiasts, holding it in a tin-roofed conference facility in the middle of a game park near Kimberly, South Africa. Corbett invited Milton to facilitate and teach. Milton was a member of the team that had implemented knowledge management at BP, and now has an independent knowledge-management consultancy. Corbett and Milton built a careful agenda of training, experiential exercises, visioning, stakeholder analysis, pilot-project identification and strategy building. They took the attendees to a point where they felt empowered and skilled enough to go back to their own part of the business to implement what they had learnt.
This workshop injected tremendous energy into KM within De Beers. For the first time the enthusiasts were united behind a vision they had created themselves. A strategy and timetable for implementation was taking place.
A suite of potential pilot projects had been identified. And most importantly, people began to realise that this was achievable – that it was possible to manage something as intangible as knowledge, and to do it within the De Beers context and culture. They also realised that simple processes can be effective.
Proving the concept – !Gariep
The workshop provided the impetus for much of our early knowledge-management activity, which, in the first few months, was focused on proof of concept – trying out some of the tools in a business setting. One of the earliest proofs of concept immediately followed the course: a retrospect of the !Gariep project.
!Gariep was a technology project in De Beers Marine that tackled some huge technical challenges in the relatively new area of offshore, deep-water diamond mining. Everyone in the organisation recognised that massive learnings had been gained during the project, but nobody quite knew how to go about capturing and packaging these lessons. The follow-on to the workshop proved an ideal opportunity to road-test some knowledge-management practices, and a two-day retrospect was set up in order to review !Gariep and identify the lessons it provided. Corbett and Milton facilitated the session, and former !Gariep team members were flown in from around the world, some of whom now worked for other organisations. In two intensive days, the lessons were identified and captured on tape, video and in notes, and have now been packaged into a knowledge asset for future use.
Although the business value of the !Gariep knowledge is being demonstrated as the knowledge is carried forward into !Gariep’s second phase, there was immediate payback in terms of generating senior-management enthusiasm for knowledge management. At the retrospect, several video summaries captured team members giving short summaries of the key lessons they had learnt. These were shown at the next senior-management meeting. Corbett was not only able to talk about !Gariep, but was also able to show short clips of young engineers sharing what they had learnt. This demonstrated that such projects could be successfully reviewed, and the lessons learnt could be articulated in useful and engaging ways for future re-use, rather than being buried in reports. Corbett was also able to play videos of observers talking about the retrospect process itself, showing how positive and open it had been, and how the process had identified ground truth and articulated it as lessons for the future. These video summaries illustrated how a real knowledge-management process had been applied successfully within the company on a project of real business concern and generated enough enthusiasm within the senior-management team to achieve buy-in from some of the most influential people in the organisation.
Proving the concept – Finsch and Premier
Diamond mining is one of De Beers’s core operations, and some of the biggest mines are in southern Africa: Finsch, Premier, Venetia, Kimberley and Koffiefontein. All of these mines have similar operations, face similar challenges and learn similar lessons. There is obviously a need for each mine to not only learn from its own experiences, but also from that of the other mines. This becomes particularly important as the mines begin to go underground, with ore extracted from tunnels and galleries rather than from open pits. Knowledge management therefore has a real role to play in making it possible to effectively transfer the unique experience and learning gained in the South African underground mines to Debswana, which faces the challenge of taking two of the world’s biggest kimberlite mines underground over the next 20 years.
Dieter Haage, manager of the Finsch mine, was already a supporter of knowledge management, and sent Bruce Emerton to the December KM workshop. Emerton met up with a number of enthusiasts from the other mines and identified several areas where Finsch could derive huge value from sharing and re-using knowledge. He returned to the mine, applied for the post of knowledge manager, and started to put some of the plans into implementation. One of the earliest activities was to hold a peer-assist meeting on the subject of earth-moving vehicles. Mines spend a lot
of money on vehicles, and management wanted to make sure that they delivered improved productivity as they moved down to the new level of the mine. The peer-assist was a meeting hosted by Finsch mine, and attended by 15 individuals from other mines and from De Beers’s major suppliers. Issues such as equipment matching, operations philosophy, maintenance, logistics and simulations were examined at the two-day event. Bringing the right people together and focusing time on discussing the key issues associated with the project injected an additional 80m rand in value.
The success of the peer assist at Finsch prompted Premier mine to try the same process of exchanging knowledge before planning its underground extension. This represented a significant milestone in the decision-making process regarding the future of the Premier operation.
Once again, a two-day event was planned involving visitors from other mines, head office and outside the group. Not only were best practices identified and exchanged, but the miners also began to get to know each other and realise that they had a lot of knowledge in common. They also built links and relationships between each other that they can use to exchange knowledge in the future.
Testimony to the commitment of our senior management came when the decision was made to appoint a full-time knowledge manager for the Exploration and Operation Division to support Corbett in the implementation of KM. Rene Ward was appointed in April 2002 and she has proved to be a great source of energy and support. Her appointment resulted in an accelerated process that now reaches beyond the initial operational focus to involve a broader cross-section of the group’s business activities.
Subsequently, the other mines have now been brought into the knowledge-sharing process and progress with the implementation, together with the benefits derived, are being tracked through the group-wide introduction of the balanced scorecard. Knowledge assets created through KM activities on the current underground mines are also being looked at as building blocks to enhance organisational learning. They will help build the knowledge-management team’s capability in helping the Block Cave Steering Committee (block caving is a method of underground mining) to develop a learning facility.
Proving the concept – Metallurgy
In parallel with this learning process, the e-business team in De Beers has been experimenting with the development of technologies to support communities sharing knowledge and expertise. The result is a tool called the Knowledge Exchange, or KEx, which enables members of a community to post challenges in order to seek advice or solutions. The initial pilot work focused on the metallurgy community, which is dispersed across the operational base and the group’s Johannesburg campus. Through the committed support of the senior team, the tool is being adopted ever more widely and the community is exchanging views on solutions to a variety of challenges, with some success. Trust has been an important element, as people need to know one another in order to exchange ideas freely, and this takes time to establish. Face-to-face meetings have been important. Group Exploration offers an example as the team is geographically dispersed so it is common for people to not have met each other previously.
Today, De Beers continues on the knowledge-management journey. The concept has been introduced and is being endorsed at the highest level of the organisation. A core knowledge-management team has been appointed, and business units are developing points of contact either through the appointment of site-based knowledge managers or knowledge champions. The tools and processes have been tried out in an operational context and adapted for the De Beers culture.
Early wins have already been delivered. A knowledge-management community has been identified, launched and is being supported. Mapping the technology requirements to provide effective future support is progressing rapidly, and the De Beers Virtual Library team is actively re-defining its future role to embrace its position at the entry point to the organisation’s knowledge. The technology is coming in to place that will provide the connectivity, the culture is beginning to change and the De Beers knowledge-management model has been completed (see figure 1).
The group’s senior managers are actively engaged in discussions about how to embed knowledge-management processes, tools and concepts within the existing business-management and performance-management processes – early adopters, such as Engineering, are proactively incorporating the KM into their core work, such as project management. Internal strategic alliances are being established to create links between the KM implementation team and human-resource development to ensure that the leaders and teams who will shape the future success of De Beers know how to apply KM processes and understand the benefits. Corbett has also been given an opportunity to expand the work to look more closely at organisational learning in De Beers, and is seeking an organisational-learning manager to join the team.
As the model is applied, and processes are proved and embedded, knowledge management will help the people in the organisation to deliver value effectively. KM is being applied to some of the biggest issues and projects within De Beers, such as block caving, which is strategically important for the future of the group’s kimberlite mines and big capital investments in Namibia.
The company is poised to build a systematic, strategic and integrated approach to the knowledge management. The aim is to help people at all levels of the organisation to realise their own goals and ambitions. The roll-out will take De Beers towards a world where it is part of the way the company works, where KM processes are part of the normal business of project management, and where knowledge and the people who have, create, share and apply it are seen as a cherished competitive resources.
Ian Corbett is general manager for intellectual capital within the Operations and Exploration Division at De Beers
Nick Milton is director of training and product development at Knowledge Transformation International. He can be contacted at firstname.lastname@example.org