MAPPING THE FUTURE IN UNCERTAIN TIMES
ON PAPER, ROB MCEWEN WAS AN UNLIKELY CHAIRMAN
and CEO for Canadian mining company Goldcorp, Inc. With a background in ﬁnance, the small, soft-spoken man with the neatly-trimmed moustache preferred meticulous tailoring to industrial machinery. But despite his appearance, McEwen was a prospector at heart: he had a fascination with gold and grew up hearing tales from his father about miners, prospectors and grubstakes at the dinner table. So smitten was he with the industry that he hammered out
by Alonzo Canada
his own template for what he thought a 21st-century gold-mining company should look like, despite never having worked for one. In 1989, he made the leap, stepping into a takeover and becoming majority owner of under-performing Goldcorp. Some called him crazy for buying what was regarded as a rust bucket of a company. At the time, the gold market was depressed; the mine’s operating costs were inﬂated and the miners were perpetually on strike. McEwen even received a death threat; but he Rotman Magazine Winter 2010 / 41
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Opportunity Maps can help leaders make choices about what to do ROT101 and what not to do, charting a path for future growth.
stuck with it, because he believed the business had a promising future. “The Red Lake gold district had two operating gold mines and 13 former mines that had produced more than 18 million ounces combined,” he once said. “The mine next door had produced about 10 million ounces; ours produced only 3 million.” McEwen believed that the high-grade ore that ran through the neighboring mine was present in parts of the 55,000-acres he owned – if only he could ﬁnd it. To turn around his dream company, he needed to ﬁnd new sources of value within his existing business. He had to make some very big decisions about where to dig, and he couldn’t afford to be wrong. Inspiration struck him one day at an MIT seminar, where he learned about open-source code, wide collaboration and the story of the increasingly-popular Linux operating system. McEwen realized that if he could attract world-class talent to the problem of ﬁnding more gold in Red Lake, they could potentially transform Goldcorp’s geological data to reveal the most promising places to dig. He didn’t need to get lucky: he needed new ways to see where value was hiding on his property. The rest, of course, is history. McEwen launched the Goldcorp Challenge in March 2000, splaying the company’s proprietary geological data to the world. More than 14,000 scientists, engineers and geologists from 50 different countries downloaded the data for virtual exploration. The winner of the contest was a collaboration by two groups in Australia, Fractal Graphics and Taylor Wall & Associates, which together developed a powerful 3D graphical depiction of the mine. Goldcorp drilled four of their top ﬁve targets and struck gold on all four. This new way of looking at the business laid the foundation for McEwen to restructure Goldcorp, increasing its market capitalization from $50 million to more than $13 billion and growing its share price at a 40 per cent compound annual growth rate. When McEwen bought Goldcorp, it was failing largely because it was unable to see where true value resided on its property. Its existing maps were insufﬁcient, because they simply articulated previously-made discoveries, which had obvious limitations. As Albert Einstein once said, “the deﬁnition of insanity is doing the same thing over and over again and expecting different results.” In order to renew growth at Goldcorp, McEwen needed a fundamentally-different way of seeing the world. His approach of pooling experts to solve his problem is widely celebrated as a beneﬁt of using an ‘open innovation approach’. Less-often discussed is the output from Fractal and Taylor Wall: the team crunched, reconstituted and synthesized mountains of geologic data into a wholly-new map that revealed promising...