Insider knowledge: how to train Russian mining managers

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With staff working in mines ranging from the wilds of Siberia to the sweltering heat of South Africa, it is not easy for Evraz, the Russian steelmaker, to create a unified outlook among its managers.

Developing an executive education programme was vital to give managers an understanding of the company as a whole, says Natalia Ionova, head of human resources. The architect of the company’s in-house executive education drive, she worked with Moscow School of Management Skolkovo on the course.

“In 2008, during the financial crisis, we felt Evraz needed new approaches to management – both at its head office and in the regions,” says Ionova. She did not let a global slump in commodities prices halt the plans for management education, but instead used it as an opportunity to rethink management practices from board level down to the miners in the wastes of the Russian hinterland.

“We decided to move ahead and not allow the crisis to hold us up, because the success of a company depends on the quality of its staff. Evraz is a fast-growing company and we face new challenges as we expand,” says Ionova about the decision to go ahead with the programme, which allows executives from all tiers of management to work on solving problems.

Since the launch of the executive education course two years ago, 92 Evraz managers have graduated from the one-year modular programme run by the Skolkovo school, which is headed by Wilfried Vanhonacker, the former dean of Shanghai’s China Europe International Business School.

During the course, staff have worked with chief executives as well as management and business experts to find solutions to 16 real-life challenges, from cost-cutting at production plants to global marketing strategies for rare-earth metals. Evraz has implemented the best of these.

“The people on the courses know the company from the inside, so they can share experiences, and the programmes give them the tools to develop ideas and implement innovative solutions,” says Ionova. “It’s better than hiring MBA graduates from outside.”

One of the advantages of designing a programme is the ability to tailor the curriculum to the particular needs of a company and find solutions to problems that managers face in the field. For Evraz, Skolkovo recruited industry experts alongside the more usual management gurus to teach course modules.

One of the groups on the 2010 programme reworked the company’s strategy for producing vanadium, a rare-earth metal that is a key component in making flexible steel for construction. Evraz is the market leader but that is by no means assured, so the group looked at ways of retaining its position and marketing its output as a better alternative to that of its rivals. These suggestions have been implemented across Evraz.

This year, the company is using the Skolkovo programme to develop a crack team of global engineers working in mines from Russia and Ukraine to North America, South Africa, the Czech Republic and Italy. Production staff will spend the year thinking about mining challenges and comparing different educational and production techniques they have learnt both on the job and from their wildly varying educational backgrounds.

“The lack of high-quality engineering professionals nowadays is a common problem for steel and mining industries all over the world,” says Ionova. “We want to create an international team that can face our worldwide production engineering challenges, from issues to do with the ground we are mining to what technology to use.”

Ilya Dmitrov, a director of investment projects who manages a team upgrading production facilities, graduated last year and says a key advantage of the modular course was that it enabled him to learn about new business ideas and then put them into action before his next module of classes.

He was charged with making production more efficient at the company’s Nizhny Tagil Iron and Steel Plant in the Urals. Working closely with senior management and managers at different departments across the company gave him a much broader view of the problems he was trying to solve.

“When you are working, you are usually looking at just one side of the problem, but when you are studying with other executives, you get the chance to look at problems from many angles,” says Dmitrov.

Since graduating, he has been promoted to head a larger department, as have 60 per cent of the other graduates. “People who study this programme form a strategic reserve for the company, and after they finish they are promoted based on improved results on the job,” he says.

Ionova says the project has given many managers the opportunity to understand the company overall as well as improve overall corporate culture.

“Executive education cannot change strategy,” she says, “but it allows managers to deepen their knowledge, broaden their view of the company and bring together different layers of management.”

Most importantly, managers have been able to use some of the best global corporate minds as well as industry experts to tackle the thorny day-to-day challenges of mining.

“Work on real projects is the main engine of our programme,” says Ionova.

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