YAMAHA GOLD INNOVATION
Innovation lessons from a Canadian mining company’s astonishing transformation
Eighteen months ago, Yamana Gold, a Canadian precious metals mining company, made a decision to become more innovative. Now, it has over 30 innovation projects underway, using disruptive technologies like machine learning and the Internet of Things.
What’s the secret to this amazing transformation?
Innovation has to be a deliberate practice, said Joe AbiDaoud, Yamana Gold’s vice president of information technology at a recent ITWC webinar. To do that, AbiDaoud established a “comprehensive” and cross-functional innovation program.
“It’s a trifecta of people, process and technology,” he said. “We learned from others that to try to implement technology without taking into account the impact on people and process, can lead to a traumatic failure.”
How to get buy-in from business leaders
The first lesson is to gain executive support for the innovation plan by aligning with corporate objectives. “The IT team has to show how it will impact the business and put a timeline on it, said Thomas Henson, senior systems engineer with Dell EMC.“IT has to be business savvy,” he said.
For Yamana Gold, innovation has to either solve a business problem or create a new business capability, said AbiDaoud. “There are concrete business outcomes that have to be understood early on.” The company’s innovation projects must impact at least one of its four core business areas. “If they don’t, we move on,” he added.
In the mining industry, companies look for a competitive edge in areas like talent and assets. That’s why the majority of its innovative projects focus on improving exploration techniques. “We are working with partners to use machine learning to better understand massive geology data sets,” said AbiDaoud. “Machine learning is disrupting every industry out there,” added Henson. “It’s an opportunity to mine for gold in the data you already have.”
Avoid the digital disconnect
In developing its innovation strategy, Yamana Gold’s leaders took a close look at the company’s decision-making processes and organizational design to eliminate silos and encourage collaboration. “We wanted to bring the mining sites and corporate closer together,” said AbiDaoud. “We believe that 70 per cent of innovation is brought to the company’s attention from the sites. So we decided to nurture continuous improvement and measure it.” Radical and transformational change make up the remaining 30 per cent of the innovation agenda. “This is the disruptive stuff and corporate leaders have a role to play,” explained AbiDaoud. The company set up a cross-functional C-level committee to “put top level blood and sweat into it. Innovation is not the responsibility of any one department,” he added.
Early in the process, Yamana Gold hired a Director of Innovation and Transformation to put more detail into the plan. From a financial perspective, a specific budget was assigned to innovation and employee incentives were created to encourage it. “We don’t want to penalize people for experimenting and taking risk,” said AbiDaoud.
It’s also important to learn from the experience of others. AbiDaoud suggested that innovation leaders should immerse themselves in an ecosystem of academic institutions, peers and service providers to stay current. “We’re not doing innovation in a bubble.”
Overall, AbiDaoud said Yamana Gold has made significant progress in 18 months with its innovation program. “Innovation is not accidental,” he said. “There has to be a deliberate strategy to innovate and gain competitive advantage.”
veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.