De Beers Marine (South Africa): dealing with the past through the HPO Framework

The case below is a summarized version of the complete De Beers Marine (DBM) case, published in our latest book ’What Makes a High Performance Organization’.

KEY MESSAGE: Events that happened in the past can influence the HPO status of an organization for quite a long time. Management has to be aware of this when interpreting the results of the HPO Diagnosis and deciding on subsequent actions.

De Beers Group Services is a diamond exploration, mining and rough diamond trading company established in Kimberley, South Africa, in 1888. One of its ubsidiaries is De Beers Marine (DBM), which mines for diamonds on the seabed. DBM’s activities span the range of exploration, resource development, survey/geophysics, sampling, capital projects, building of marine mines, operation and maintenance of the marine mines and the associated support infrastructure, R&D, technical support and operations management. The vessels under management of DBM include the Coral Sea, the Douglas Bay, the Peace In Africa, two AUVs (autonomous underwater vehicles), and chartered vessels. DBM’s headquarters are in Cape Town. Employees on the vessels work 28 days on and 28 days off, while shore-based employees are on normal office type conditions. DBM was established in 1983 with production starting in 1991 in Namibia. In 2001 a new entity, De Beers Marine Namibia (DBMN), was formed to manage the operations in Namibia. DBM’s value chain is in the upstream part of the diamond pipeline, as the company’s involvement ends at getting the rough diamonds from the seabed. Downstream activities are handled by the De Beers Group.

The HPO Diagnosis at DBM

The HPO Questionnaire was distributed among managers and employees of DBM and after processing the data, interviews were held with six people during a week spent by the HPO Center in Cape Town. This week was concluded by a presentation of the HPO Diagnosis results to DBM’s management. The average HPO score of the company was 6.4, which meant that DBM was an average performing organization and not yet an HPO. The HPO graph was almost level, which showed that DBM was a well-balanced company, a good starting-point for improving all HPO factors.

The HPO status of DBM was heavily influenced by the history of the company. Until 2000, the situation of DBM was relatively stable, as the company was part of the ‘De Beers family’ and could count on a steady and predictable workload. After 2000, DBM was spun off as a separate entity which had to take care of its own income. This entailed that former colleagues in the De Beers family suddenly had to be treated as clients, and that DBM now had to obtain its own sales and undertake its own ventures. This put a great deal of pressure on the organization because it had to develop sales and business capabilities while at the same time safeguarding the high quality of its technical processes. The HPO Diagnosis showed that DBM was a technically very proficient company with a historically strong focus on further development of the technical processes. The processes that could improve the HPO factors, on the other hand, did not get as much attention. Since 2006 the company had paid some attention to strengthening its business processes, but the rate of innovation and improvement in that area was still lagging behind that in the area of the technical processes. In addition, the worldwide crisis and subsequent recession affected the organization negatively which meant that a substantial number of the employees had to be laid off and several business functions were outsourced to reduce costs. After studying the HPO scores and the interview write-ups, the HPO Center identified four main HPO attention points which DBM had to address to make sure the company would continue on its route toward HPO.

• Attention point 1: Increase the quality of management
• Attention point 2: Improve dialogue between management and employees
• Attention point 3: Better manage the improvement process
• Attention point 4: Create a culture of innovativeness in the whole company

From the HPO Diagnosis it became clear that ’Continuous Business Improvement’ alone would not be enough and that additional initiatives were needed to change the minds and attitudes of both managers and employees toward HPO thinking. Also, more room had to be created for initiatives from the work floor, which should be more supported than in former days by management. The recently introduced slogan ‘Can do great things … done’ should get more content and follow-up. The first action management took was mapping out the route to get employee buy-in, and it was decided that business update sessions, in which management and employees meet to discuss current and future DBM affairs and ongoing projects, was an important mechanism to use in this respect. The second action was to put specific HPO actions in DBM’s strategy. The third action was to develop a form that assessed managers’ ability to Plan, Lead, Organize and Control in order to evaluate the leadership and management capabilities of DBM’s managers. Subsequently almost all managers went through an assessment made by their employees. DBM then started to develop an E-learning module to assist managers to develop themselves to be higher-quality managers. In conclusion, DBM was very happy with the HPO Diagnosis and stated that it helped the company greatly in its pursuit of becoming an HPO.

Read the complete De Beers Marine case and many more HPO business cases in our latest book: ’What Makes a High Performance Organization: Validated Factors of Competitive Advantage that Apply Worldwide’.