Mining is at a critical juncture. The energy transition drives unprecedented demand for metals like copper, nickel, and aluminium. McKinsey estimates that capital investments will reach $1 trillion over the next decade. So far, so good, but here’s the kicker: McKinsey argues that inefficiencies plague mining projects. They estimate cost overruns averaging 40-79% and delays exceeding 50% for large-scale projects. Addressing these problems isn’t only about improving profits: they are essential to ensuring an industry that can fulfil global needs for materials critical to sustainability.
One potential solution lies in the principles outlined in John Doerr’s book Measure What Matters. These principles are widely credited with contributing to the success of Google, Amazon, the Gates Foundation, and Adobe. Doerr advocates that a shared ownership and accountability model is critical to success. He explains that companies achieve this by implementing Objectives and Key Results (OKRs).

Let’s see how we can apply his tested methodology to the mining industry's current challenges.

Focus on What Truly Matters
At the heart of OKRs is the concept of focus. Let’s be clear—one of the reasons mining projects are seldom delivered on time and within budget is that priorities are not clearly defined. This is particularly acute and fatal during the early planning stages. Poorly executed feasibility studies and fuzzy project goals result in misaligned expectations and massive inefficiencies. This is where the OKR framework shines. Applying the principles will enable mining companies to deliver more accurate feasibility studies.
To take just one example, the nagging issue of flawed feasibility studies. These studies are the bedrock of any project but tend to be rushed and insufficiently deep to take uncertainty into account. The OKR framework might set an objective of producing more accurate feasibility studies that can be measured by the percentage reduction of the difference between the estimated cost and the actual cost of the project. McKinsey found that better feasibility studies reduce the variance between estimated and actual project costs by 20%. Clear goals, linked to tangible results, enable leaders to focus and allocate resources to creating robust studies, laying a strong foundation for future success. This emphasis helps funnel resources toward good studies that set a baseline for success.

Creating Alignment Among Stakeholders
Another persistent challenge in mining is alignment among contractors, project teams, and operators. Disjointed incentives and communication breakdowns lead to execution inefficiencies that compound cost and schedule overruns. OKRs can fill the gaps by creating a typical structure to connect and align the goals of all participants.
Let’s imagine a scenario where a mining company is managing a megaproject with multiple contractors. Each contractor has its own priorities, leading to competing interests and a disjointed approach that ultimately stalls the project’s momentum.
By implementing OKRs, the company can create a shared objective, such as collaboration among different teams to improve execution efficiency. Key results could include implementing a transparent reporting system accessible to all stakeholders or conducting regular collaborative workshops to address bottlenecks. This helps ensure that all stakeholders move in the same direction, working toward shared goals rather than competing agendas.

Monitoring Progress and Driving Accountability
Another critical issue in mining projects is the lack of real-time tracking and accountability. Projects are often derailed because issues are not recognised and resolved in time. OKRs stress the importance of frequently tracking progress against agreed-upon key results, allowing fast course corrections.
For instance, in the execution phase of a project, OKRs may aim to improve productivity. The goal might be to improve on-site efficiency, with key results like implementing advanced project management tools or increasing the use of digital workforce solutions. Regular checks against these results would allow project owners to spot developing problems, like slow material deliveries or unproductive departments or teams, and take remedial action before those problems become crises. This hands-on approach can help to avoid minor issues snowballing into cost overruns or significant delays.

Inspiring Ambition to Tackle Long-Standing Challenges
OKRs are not only about doing a little better; they are also about inspiring organisations to set ambitious goals that drive innovation. For mining, these may allude to decades-old problems such as sustainability and talent shortages.
Take sustainability as an example. Many companies know they will be required to lower their environmental footprint, but they have remained stagnant. By adopting an OKR to lead in sustainable practices, a company might aim to reduce greenhouse gas emissions in project delivery by 30% over two years. Achieving such an ambitious goal will most certainly require innovative approaches, such as integrating ESG standards into all project phases. While ambitious, these goals push the industry to innovate and adapt, creating a competitive advantage while addressing broader societal demands.

Building a Culture of Performance and Agility
Finally, the mining industry's deeply entrenched legacy practices often hinder its ability to adapt to changing demands. OKRs can help foster a performance-oriented culture by promoting transparency, accountability, and continuous improvement.
Addressing the industry’s talent shortage requires a long-term investment in people development. A company can set an OKR to build a high-performing, diverse workforce, with measurable outcomes like providing extensive training programmes or increasing representation of women in mining. By embedding these goals into the organisational culture, mining companies can ensure teams are equipped to meet evolving challenges while fostering an environment of inclusivity and innovation.

Mining: A Path Forward
As the global demand for essential minerals expands, the urgency of executing projects responsibly and efficiently has never been more acute. For mining companies, the OKR framework offers a new way of thinking about how projects will get done. A disciplined approach to developing focused objectives, aligned teams, real-time accountability, ambitious targets, and a performance culture can tackle the industry's systemic problems.

OKR principles are more than a project management method—they’re a shift in mindset. Adopting this framework would help the mining industry put its house in order and leave the door open for it to be a leader in satisfying the needs of the energy transition. The journey won’t be easy, but with clear objectives and a commitment to measuring what matters, the industry can unlock its vast potential and deliver projects within budget and on time.

[Submitted by Estea Rademeyer]