In 2012, the executives of Coeur Mining Inc. found themselves between a rock and a hard place.
Wanting to reinvent itself after appointing new CEO Mitchell Krebs in July 2011, Coeur came up with an ambitious plan: move the company’s corporate headquarters from the pleasant scenery of Coeur d’Alene, Idaho — its home since 1985 — to the concrete jungle of Chicago.
By leaving the distant northwest, Coeur executives said the company could better coordinate travel among mining sites across the globe while directing its business in the country’s third largest market.
But much like extracting valuable minerals from the earth’s hardened interior, Coeur’s move would require a lot of heavy lifting. For starters, 80 percent of the company’s corporate employees in Coeur d’Alene decided not to make the move, meaning Coeur would work to provide those workers adequate outplacement resources.
That left 85-year-old Coeur with the task of having to recruit nearly 60 new employees for its corporate workforce upon arriving in Chicago — an act that would require a facelift of its talent management philosophy and a change in company culture.
It would also need to design a strategy to relocate the small percentage of workers making the move from Idaho, among other logistical challenges.
“We got a chance to push reset on a lot of systems, processes and functions,” said Keagan Kerr, Coeur’s senior vice president of corporate affairs and human resources, “which is rare for a company that’s been around this long.”
Chicago’s Silver Lining
Formed under the name Coeur d’Alene Mines Corp. in 1928 to mine silver in its namesake region of Idaho, the company concentrated much of its operations in the state in the decades that followed before selling the last of its mining assets there in 2006, according to securities filings.
Today, most of the company’s miningoperations reside in Nevada and Alaska in the U.S., as well as Argentina, Australia, Bolivia, Chile, Ecuador and Mexico. The largest producer of silver in the U.S., Coeur reported annual revenue of $745 million in 2013, the most recent period for which figures were available.
Business has been tough for the historic miner of late, as a general malaise in the price of gold and silver has weighed on Coeur’s profitability, according to a report by Seeking Alpha, an equities research publication. It is against this backdrop that in 2012 Coeur’s executives looked to ignite a radical change. With transformation and growth a top priority, Krebs in May 2013 plucked Kerr from rival Barrick Gold Corp. and asked him to initiate a plan for a new organizational model.
Ultimately, Coeur’s transformation prompted a search for a new home, a place that would provide the company with a broader talent pool and represent a fresh start. “When you’re around something so much, like in the same house for 45 years, you become stagnant,” Kerr said. “To transform the company, sometimes you need to move the company.”
Though Coeur knew it wanted to relocate corporate headquarters, it didn’t initially know where it would go. The executive team evaluated 16 cities, including Denver and Dallas, before it settled on Chicago.
Part of Chicago’s allure was the city’s two airports — O’Hare International Airport and Midway International Airport — which Kerr said would make it easier for employees to travel to the company’s mines in Alaska, Nevada, Bolivia and Mexico. Proximity to convenient air travel would encourage employees to take a more hands-on approach by visiting Coeur’s mining sites, something many employees didn’t do prior, said Jorge Rodriguez, the firm’s director of human resources operation.
“There used to be a very hands-off approach to the sites, and as long as the results were there, there was less back-and-forth going to the sites,” said Rodriguez, who transferred with the company from Idaho to Chicago. “There were people who never made it to the sites, and that has definitely been a change.”
Chicago, the country’s third largest metropolitan area by population, would provide Coeur with a rich and vast pool of business talent as well as access to other financial resources. Its office on the city’s main drag, Michigan Avenue, would provide employees with a generous view of Lake Michigan and Millennium Park.
“When you come to the new market place with an 80 percent hire need, they [Coeur] picked Chicago wisely,” said Bruce Hoch, managing director of DCG Corplan Consulting, which provides research on economic geographies. Because Chicago’s labor market is large and varied, Coeur could afford to be selective as it recruited for its new location, Hoch said. “There has to be enough people showing up to interviews that they can pick the best people they can get.”
But before the company could settle into its new digs and start recruiting, it first had to help in the transition of the employees it was leaving behind.
Coeur provided the 80 percent of employees not making the move to Chicago benefits continuation. Those who remained on through the entire transition received a 20 percent supplemental bonus as well.
It also provided these employees with what it termed “career development services,” including access to a personal career consultant, career transition workshops and online interactive assessments and occupational research.
Those continuing on in Chicago received full relocation coverage and cost of living allowances, including $10,000 for miscellaneous expenses, Kerr said. Each relocating employee also got a 20 percent bonus, was able to buy restricted company stock and received home buying and selling assistance. The company declined to disclose the total cost of the move.
Full Steam Ahead
Still, with only a fifth of Coeur’s corporate employees making the move, Kerr faced having to hire 58 new people in Chicago, an area with a dearth of talent with mining industry experience.
This was exactly the point, Kerr said. Wanting a fresh cultural perspective, Kerr said he purposefully targeted talent from outside the mining industry. In the end, about 40 percent of the new corporate hires came from industries other than mining.
“As they say, variety is the spice of life,” Rodriguez said. Having people from different fields would provide Coeur with a more experienced group that can give fresh input on business ideas from a nonmining perspective. “We can take the benefit of having the knowledge of mining and also have the knowledge of large, successful companies, which is what we’re trying to be.”
Among these fresh faces was Emilie Schouten, who would become the firm’sdirector of talent acquisition and development. She came over from General Electric Co. with little knowledge of the mining business.
That didn’t stop Schouten from becoming pivotal in Coeur’s transition from Idaho to Chicago. Hired in May 2013, the same month as Kerr, Schouten took the lead on the company’s hiring needs to staff the corporate office by its opening the following September, much of it without the help of external headhunters.
Staffing a new corporate headquarters, however, is difficult when that office space doesn’t yet exist. So Schouten and Kerr turned to selling Coeur’s history, cultural values and business plan, as well as remote interviewing techniques and locations, such as hotel lobbies and coffee shops. Even without a physical space to showcase, Schouten and Kerr hired 34 people between May and September 2013.
“There are periods of 2013 that I don’t remember because I was always up writing offers in hotel lobbies and coffee shops,” Kerr said.
To help alleviate the recruiting stress, Coeur’s executive team pitched in and interviewed candidates as well. Kerr said part of the reason many candidates accepted the company’s offers was likely thanks to the level of senior executive involvement in such interviews. Instead of being able to promote swanky offices, Kerr said, Coeur could highlight its executives’ commitment to talent.
With recruiting momentum behind it and new employees coming in, Coeur faced a new challenge: onboarding a large percentage of its new corporate workforce. While onboarding a mass of employees is already a tall task, doing so when most of those coming in are entirely new to the mining business requires an additional level of thought and planning.
To set an inclusive tone, the company started by hosting an entire day for new employees and their families. Here they had the opportunity to learn about mining and Coeur. The day even featured an opportunity for employees’ children to make their own gold and silver cookies.
In addition to including employees’ families on the experience of entering the mining business, Coeur held a two-day mining 101 class where new hires learned the basics of the business. A professor from the British Columbia Institute of Technology taught the course, which provided an overview of the industry. It hit on topics from geology, mineral deposits, exploration, drilling, mining methods and mineral processing.
“You can’t be effective in a role if you don’t understand what our business does,” Schouten said.
With the recruiting and onboarding complete, Coeur’s talent leaders turned to overhauling the company’s talent management system. This included splitting up the organization’s previous operating structure.
Kerr said mining companies typically have technical services, metallurgists, engineers and capital project teams report into the operations branch. Under Coeur’s new model, those functions were split and put under a separate leader.
The environment and safety departments also split, as did treasury and finance. Additionally, Coeur created a new financial planning and analysis team to help research capital and cost for the company.
“We had run very lean in Idaho, and we’re still really lean,” Kerr said. “But we wanted to take the time and put the investment in for key processes and people to move the business forward. We’re just starting to see that investment. It doesn’t happen overnight.”
Part of the challenge of initiating massive changes at a public company comes in how the changes are communicated to shareholders. Coeur’s move and subsequent cultural facelift required it to sell the potential fruits of the effort to its investors. To this end, Coeur held a town-hall-style meeting for its investors in January 2014, where it broadcast the company’s talent management goals for the year. Kerr said communication to investors on the company’s transformationis ongoing.
Meanwhile, most of the benefits havealready surfaced internally.
Most visible, Kerr said, is more employees being able to take a hands-on approach to the business by visiting the mining sites. Rodriguez, whose job revolves around traveling to each site, said he has seen how mine workers have reacted to the new Coeur mindset. For those working in the mines, interacting with corporate employees has bolstered the company’s sense of shared purpose.
“We have a presence, and there is a connection,” Rodriguez said. “We’re changing the paradigm. We’re changing the way we work with them and letting them know they’re not in a vacuum. They’re part of a big organization.”
Now more than a year settled into its new offices and organizational structure, Coeur’s talent management overhaul is still ongoing. And with many of the new hires entering their first year of service with the company, the talent challenge now shifts to finding ways to retain and engage employees.
“One of the things we need to do at Coeur is hold onto the talent we worked so hard to get,” Kerr said.
To do that, Kerr and Schouten re-evaluated the company’s performance evaluation processes. The result was Coeur’s Culture of Achievement.
At the beginning of the year, employees set up goals on an application called “Springboard.” The program allows them to line their objectives up with those of the company so they can see how their day-to-day jobs influence the organization. Then managers give feedback in the middle of the year on how employees are doing against those goals.
The end of the year comes with another evaluation, and final outcomes are based on whether employees did what they said they would do and how they did it. “You can be the best technical person all day long,” Schouten said, “but you’ve got to make sure you’re behaving in such a way that’s collaborative with your co-workers.”
Evaluations are based on achievement behaviors, such as accountability and communication, and derived right from the words ofexecutives in a companywide meeting held at the height of the move. Based on performance, each employee also creates a development plan that can help fill skill gaps as the company and its talent continues to grow.
While the goal-based evaluation might seem standard to some talent management professionals, where Coeur’s Culture of Achievement defies the norm is in its lack of ratings.
“I remember performance evaluations where there was a matrix, a series of numbers and scale that told me one was good and five was bad, and it all added up to a certain number and that number equated to my compensation,” Kerr said. “That didn’t feel good. I want employees to feel good about the contributions they’re making, and this is the way to do it.”
Not only does the switch affect current employees, but it also helps with Coeur’s ongoing recruitment. Schouten said for now the company hasn’t had to hire many more people since the new performance management practice began. For the few people they have brought in, their offer letters state that the employee is becoming part of a Culture of Achievement.
Schouten also said the newness of the company’s staff makes it easier to roll out new programs — a sentiment that can be applied to Culture of Achievement and the organization’s other changes.
“There’s the beauty you have in finding that sweet spot opportunity,” she said. “Organizations get set in a certain way, and when you get the tremendous opportunity to do something different because of the people or the timing or the leadership — that’s what we hit, and it’s just perfect.”