CPA Mining & Resources Conference 2012

Leading Through Uncertain Times, what differentiates dynamic organisations

23 November 2012

Rory GreggPartner – Operational AdvisoryGrant Thornton Australia

www.rorygregg.com@rory_gregg#cpacongress

over 120 partners &

Tax AdvisoryAssurance

1,500 professionals

Helping dynamic leaders grow their businesses

AGENDA Global Dynamism Index (GDI 2012)Challenges facing mining & resources leadersStrategies for leading through uncertaintyQuestions

What is it“The GDI is a series of performance indicators that analyses and measures the resilience of 50 diverse economies and their capacity to recover from a change in economic circumstances.”

Global Dynamism Index (GDI 2012)

Global Dynamism Index Business Operating

Environment

Economics & Growth

Science & Technology

Labour & Human Capital

Financing Environment

Key Findings Top Economies(GDI 2012)

Business Operating

Environment



Finland

Sweden

Israel

Singapore

ChinaIreland FinlandSweden

Argentina

Slovak Republic

Uruguay

Economics & Growth

Argentina

Uruguay


Finland

France

Key Findings Regional Insights (GDI 2012)

51Middle East and

Africa

66.1Nordic

59.2Western Europe

62.9North America

53.8Latin

America

55.7Eastern Europe

59.3Asia Pacific

55Growth8

60G7

57All

Countries

Key Findings Country Insights (GDI 2012)

Singapore72.1

Most dynamic

Finland70.5

Sweden69.6

Israel69.3

Austria66.1

TOP 5United States64.1

China61.4

No.10No.20

Australia65.6

No.6Best - Business operating environment- political stability (96)

Worst – Financing environment- inbound M&A deals (6)

Key Findings Where Australia Stands?

51.0Middle

East and Africa

66.1Nordic

59.2Western Europe

62.9North

America

53.8Latin

America

55.7Eastern Europe

59.3Asia

Pacific

Top 3 Ranking

1 - Singapore (72.1)

2 - Finland (70.5)

3 - Sweden (69.6)

Australia & New Zealand

6 - Australia (65.6)

11 - New Zealand (63.9)

Bottom 3 Ranking

48 - Greece (40.2)

49 - Nigeria (40.2)

50 - Venezuela (37.4)

Business Operating Environment (91)Top 15% of economiesStrong political stability

Economics & Growth (59)Real GDP growth low compared to top performing economies

Science & Technology (51)R&D as a % of GDP was low compared to top performing economies

Labour & Human Capital (64)Aust labour productivity rates and % of workforce under 30 is low compared to high performing economies

Financing Environment (63)Ranked low in growth of value of inward M& A deals but high in financial regulatory systems

What does this mean for Australia Global Dynamism Index

Business Environment

91

Challenges facing Australian leaders

Increased focus in compliance & risk

High corporate tax rates

Cost of doing business in Australia


64


Attracting & retaining talent

Increase pressure on wage costs

Constrained by traditional resourcing models

Replenishing talent pool


63


Accessing capital for growth

Identifying suitable M&A targets

Appetite for risk

Economics & Growth

59


Population size continue to constrain GDP growth

Low productivity rates

Geographical isolation


51Challenges facing Australian leaders

Under investment in technology

Over reliance on US/Europe to lead technology innovation

Slow to adopt new technologies & ways of working

JUMEX Survey 2012 Key findings

#1 Issue for 2013Availability of equity capital

68% of mining companies planning to raise capital in 2013

Competition for scarce capital

Investigating alternate funding models

Joint ventures, asset sales, mergers

Mining & Resources 2012 - 13 Key Priorities

2012 PriorityGeneral stability of financial markets

2013 PriorityAvailability of equity funding

2012 PriorityAvailability of equity finding

2013 PriorityStability of financial markets

2012 PriorityVolatility of commodity prices

2013 PriorityVolatility of commodity prices

2012 PriorityAvailability of skilled workforce

2013 PriorityAvailability of debt funding

2012 PriorityAvailability of equipment

2013 PriorityAvailability of skilled workforce

Conquer local markets before growing offshore

Australia’s population limits growth options for many businesses

80 percent of large Australian businesses accept the need to expand into Asia1

Don’t be afraid of doing business in international markets

Strengthen your ties and business in Asia and emerging economies

Leadership Myths Leadership Realities

1 Grant Thornton Australia, 2012

Establishing aspirational goals is the key to guiding an organisation to success

Don’t mistake vision for strategy

Focus on iterative and rapid execution to achieve performance improvement

Don’t be afraid to change tactics or strategy


Focusing on improving existing products and services is a low risk path to future profits

"Doing the same things better" is not necessarily the path to future success

Fluctuating terms of trade, looming skills shortages and new technologies are major sources of future instability

Leaders need to constantly question assumptions and explore innovative alternatives


Skilled workers are easily hired Adopt a broader range of workforce and resourcing strategies is essential for future sustainability.

Explore outsourcing, talent retention, flexible work models

Develop tactics for lifting use of women and mature age workers. Women are paid up to 19% less than male counterparts2


2 Australian Bureau of Statistics 2012

Workforce productivity only relates to the number of hours employees work divided by total output

Productivity is not just about wages. It depends on a combination of factors.

Redesign work practices to reduce inefficiency and duplication.

Consider impact of employee empowerment and engagement, training, workforce utilisation, output quality and customer satisfaction measures3


3 Dept of Workplace, Employment and Education

We invest a lot in technology, and it is a high priority

Innovation is not linked to IT and infrastructure. It is a cultural issue

IT investment has plateaued over the past 18 months with the Government sector performing worst, Energy sector highest4

IT infrastructure can sometimes make it harder to change workflows, and stifle innovation

Focus on the customer experience, rather than internally focused projects


Strategies for leading through uncertaintyAustralian business leaders need to focus on what matters…

Manage Risk

Prudently

1Incremental

Planning

2Technology

EnabledService Delivery

3 Flexible Workforce

Planning

4

CPA Mining & Resources Conference 2012

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