Case Study · Response Group Insights
Pacific Coal: Rebuilding Leadership in a Unionised Mining Business
How Rio Tinto’s coal division used Systems Leadership to remove the barriers stopping its leaders from leading, and ended industrial disputation altogether.
The Challenge
Pacific Coal operated three mine sites producing coal for domestic and export markets. Like most of the Australian coal industry at the time, it had a long history of strong unionisation and regular industrial disruption. Trade unions controlled much of the day-to-day management process, from recruitment and transfer lists to overtime allocation.
In 1995, working relationships between shop-floor employees and leadership were poor, and the business was regarded as internationally uncompetitive. The owners were explicit: no further capital for new projects unless the situation improved.
The Strategy
A new managing director built a three-part development strategy: a marketing strategy to grow the business with clients willing to pay a premium; an operating strategy to improve competitiveness through better work processes; and a human relation strategy focused on the effectiveness of the relationships between people delivering the business.
It was this third strategy where Systems Leadership Theory made its biggest contribution, built around three goals: developing effective managerial leadership, designing HR systems that supported that leadership, and eliminating counterproductive systems and practices.
What Changed
Response ran a five-day leadership programme across all levels of the business with leadership accountabilities, over an 18-month period, to embed Systems Leadership models as a framework for understanding the organisation. Shorter, manager-co-presented courses followed for the wider workforce, reinforcing the same models through team membership and team process training. In parallel, HR and organisational systems (role descriptions, performance reviews, fair treatment processes) were redesigned so leadership accountabilities were rated alongside operational outputs like safety. A series of workshops then identified every barrier stopping leaders from using their authority effectively, producing a 47-item organisational development plan.
The Results
By 1998, a review found very few of the artificial work restrictions remained.
A second stage then shifted the focus from removing barriers to sustaining the gains: a documented set of leadership and team membership principles, a second leadership development programme, and an Employee Relations Vision, ‘outstanding employees working to their capabilities in satisfying roles and contributing willingly towards company goals’, used to define and audit the culture the business wanted. Leaders had significantly more room to work directly and effectively with their people, and the business went on to acquire a third mine site.
Where It Led
Pacific Coal has continued to build on Stage 2 with a structured leadership feedback system, where team members rate their leaders against the leadership principles, alongside further leadership and interpersonal skills development based on what that feedback shows.
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