Discuss about the Entrepreneurship Hancock Prospecting Pty Ltd.
Gina Rinehart is the Executive Chairman of Hancock Prospecting. She is one of the most famous and influential entrepreneurs of Australia. Hancock Prospecting is a mineral exploration company of Australia. Rinehart inherited this successful business from Lang Hancock, her father. Due to her immense success in the business, she was named the ‘Queen of Iron-ore Trade’ by the industry. She holds the position of executive Chairman in the company. Her net asset worth is $11.4 billion as per a report by Forbes (Forbes.com 2017).
I contacted Gina’s secretary for a chat with her. After two weeks, I got a call back from Gina’s office that I can go to her office for the interview. Hence, I prepared some questions for her. It is a milestone in my career to interview the richest woman of Australia, who has built a fortune of $8 bn based on the exploration of the iron ore mines in the regions of Queensland and Western Australia. On the next Friday morning, I reached Gina’s office for the interview. It started with a very warm welcome from the lady herself, which was breaking of the ice for a novice interviewer. The conversation started with the poor performance of Australia in the Olympics. Then it moved to how much she admires Margaret Thatcher. After that I started to ask her my questions about the company and about herself.
Hancock Prospecting Pty Ltd is one of the major iron ore mining companies in Pilbara of Western Australia. Lang Hancock founded this company in 1952 (hancockprospecting.com 2017). Lang found the largest iron ore deposit of the world in Pilbara of Western Australia. Gina Rinehart, daughter of Lang Hancock inherited the family business in 1992. As the Executive Chairman of the company, Gina made immense contribution towards substantial business growth and protection of the company. She pushed forward the projects that were in the pipeline, for example, Jacaranda Joint Venture Alliance in 2007 for the tenements of various important minerals across Australia. She also entered in some joint ventures for some prospective coal tenements near Queensland during 2010 and 2011. Gina took the initiative and put efforts into coal tenements in Galilee Basin and securing a railroad and port required for coal transportation. In 2010, Gina took the venture of investment in a mine pit in Galilee. It was the first mine pit to be opened in Galilee. She was the first person to ship the extracted coal from Galilee basin to Asia via ships in 2011. It was a huge milestone for the Australian mining sector and iron-ore industry. A small private mining company became a pioneer in this field by following the direction of a West Australian woman, and handled more global and high class development projects than many large mining houses of the world. She initiated the construction of 3rd major mine of iron ore with a partnership with RTIO. In the consecutive years, Hancock Prospecting experienced a huge growth in its business under the leadership of Mrs. Rinehart.
Analysis of Gina as an entrepreneur
The 10 D’s of entrepreneurship addresses the 10 competencies of any entrepreneur required to success in the business. Not every successful entrepreneur possesses all the Ds, but everyone must possess some Ds to run the business successfully. The level of the competencies also varies from person to person. The 10Ds are: Dream, Decisiveness, Doers, Determination, Dedication, Devotion, Details, Destiny, Dollars and Distribute (Szántó 2016). From the interview of Mrs. Rinehart, it is evident that she has almost all the 10D’s in her nature. She took her father’s dream to develop their own mine and made it into a huge reality through determination, devotion and dedication. She was destined to inherit the big family business from her father and had enough money to finance all the business decisions. She became really big in the business by putting a keen eye on the details and taking things in her own hands, which is a great quality of a leader. Gina said that, people used to tell her that she was an alter ego of her father, who was a dreamer. For Gina, the taking over the company was the only option.
Rinehart is an optimistic person. Not only in case of business, but she is optimistic in her personal life too. That drove her to pursue and finally achieve her dreams despite all types of obstacles. The MBTI profile for Rinehart can be derived on the basis of how focused her attention, made her decisions and dealt with the world. From the interview, I perceive that her MBTI profile could be EFSJ. As per the characteristics of the EFSJs, Rinehart is outgoing and sociable, understands the needs of the employees, and appreciates them for the contribution. She focuses on the details and thus, puts efforts on collecting the necessary information before making any important decision (Myers Briggs Personality Types 2017). Rinehart never displayed any dark side of entrepreneurship. However, the court battle with her children regarding the assets of Hancock Prospecting had definitely made her unhappy and made relationships bitter, which is one of the dark sides of entrepreneurship (Ferguson 2012).
Analysis of the characteristics of Hancock Prospecting
For more than 50 years, Hancock Prospecting has been exploring and developing the mineral resources of Australia. It has focused primarily on the development of the prospective world class iron ore mines in the Pilbara of Western Australia. The company added Hoy Hill to their portfolio, where it will continue to make substantial amount of investments. It has signed a three State Agreement for iron ores and currently getting ready to sign a fourth State Agreement for the project of Roy Hill. It has tenements in Queensland, which has significant amount of thermal coal resources. The company also took ventures in prospective minerals such as Uranium, Lead/Zinc, Gold, Petroleum, Diamonds and Molybedenum. Hancock Prospecting has headquarters in Perth, Australia, and the building is known as HPPL House. It has another representative office in Brisbane and has exploration camps in Pilbara (hancockprospecting.com 2017)
Business Model Canvas refers to the template of lean startup and strategic management for the development of new or documentation of existing models of business. It is represented as a visual chart comprising the elements of an organization’s value proposition, customers, infrastructure and finances. It helps the organizations to align their activities according to their potential trade offs. The Business Model Canvas consists of the following nine elements (Cowan 2014):
- Key partners
- Key activities
- Customer relationship
- Value proposition
- Key resource
- Customer segment
- Distribution channel
- Cost structure
- Stream of revenue
These elements are classified into few broad categories, such as key activities, key resources, key partners fall into the category of Infrastructure. Value proposition is included under Offerings. Customer segment, distribution channels, customer relationship are under the category of Customers; and Finances include stream of revenue and cost structure of the company (Canvanizer.com 2017).
(Source: Canvanizer.com 2017)
Rinehart says, her father was able to foresee the future of iron ore mining and exploration. He could see the growth prospective when he discovered the largest iron ore deposits in Pilbara in 1952. The company always had applied the Business Model Canvas before taking any step. The father and daughter both followed the same principle. The company first identifies the customers of iron ores. Then they evaluate why the customers would purchase iron ore, and if the demand is increasing. Along with these, Hancock Prospecting evaluates the channels of distribution, customer relationships, revenue streams, primary activities, primary resources, primary partnerships such as with RTIO, and cost structure of the company. This way they apply the Business Model Canvas in their business operations.
According to Rinehart, the Hancock Prospecting has contributed significantly in the Australian economy. It is one of the biggest mining companies in the country. A major amount of iron ore extracted is exported, thereby earning a larger amount of foreign currencies. The Hope Downs Joint Venture with Rio Tinto iron ore has more than 500 employees from different cultural backgrounds. The company also invested a large amount of money for the development of Lang Hancock Railway, which transports iron ore to Dampier. It also connects the other mine, Hope South. Thus, the company has contributed in many ways in the economy.
The strengths of Hancock Prospecting are: huge availability of iron ore deposits in Pilbara, Galilee Basin where they have tenements; international policies and terms of trade; integrated planning; sustainability; operational efficiency, cost savings and skilled labor. The weaknesses are: heavy risk management; schedule constraints, rules and regulations of the government; current innovation deficit; poor communication among the shareholders and stakeholders; and interruptions in business.
Hancock Prospecting is a business in technological sector. It uses advance technologies for exploring and extracting iron ore in Pilbara and Galilee Basin of Western Australia. In this sector, the specific theories or models that the company follows are: Operational & Geological expertise, Focus on Exploration, Consistent Financial Strategy, Commitment to Sustainability and Experienced Management Team. All these theories are focused towards using very advanced technologies to locate the position of minerals above and under the ground and extracting them safely and without causing much damage to the environment. The management teams are focused towards achieving sustainable business goals at a low cost for profit maximization. This way the company has made great fortune in the last fifty years.
Refection on learning from the interview
Gina Rinehart is one of the greatest entrepreneurs in Australia. Her massive fortune is built on her company Hancock Prospecting and Hope Downs joint venture with Rio Tinto. I have learnt a great deal of things from her. She gives some advices for the young entrepreneurs. She tells them to dream big and stay focused. To start a business and achieve success, the ability to dream and pursuing that dream is very important. Determination, dedication and devotion are other important traits that should be followed young entrepreneurs. She says that patience is a great virtue in any kind of business. Without patience, one can make mistakes, which could turn out to be costly for the business. Hence, I realized that along with dreaming big, I must have the ability to foresee the future. I must also have the capability to manage any difficult situation. The leadership skills should be enhanced too for managing people. Therefore, young entrepreneurs should develop some of the 10D’s of entrepreneurship to make it large in the business.
In the coming few years, Gina and her company have some developmental plans. The projects are named as Hope 1, 2, 3, 4, 5 and 6. These projects are aimed at increasing the mining possibilities of the resource areas near Hope South, Marra Mamba, which are closer to rail infrastructure, and develop some more Hope Downs initiatives for mining. They plan to grow bigger and expand their business locally and globally (Ker 2013).
From the interview of media shy Gina Rinehart, it can be concluded that the combination of destiny and hard work pays off well. Along with those, determination, dedication, devotion, attention to details, communication, motivation, and leadership skills can make a person good entrepreneur if he has the capability to take risk and plunge into new ventures. All of these qualities have made Gina Rinehart the most successful women entrepreneur and richest woman of Australia.
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Cowan, A., 2017. The 20 Minute Business Plan: Business Model Canvas Made Easy. [online] Alex Cowan. Available at: https://www.alexandercowan.com/business-model-canvas-templates/ [Accessed 18 May 2017].
hancockprospecting.com, 2017. [online] Available at: https://www.hancockprospecting.com.au/about-hancock-prospecting/company-overview/ [Accessed 18 May 2017].
Ker, P., 2013. Hancock Prospecting edits annual report. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/hancock-prospecting-edits-annual-report-20130513-2jhlx.html [Accessed 18 May 2017].
Myers Briggs Personality Types, 2017. ESFJ Personality Profile – Myers Briggs (MBTI) Personality Types. [online] Opp.com. Available at: https://www.opp.com/tools/mbti/mbti-personality-types/esfj [Accessed 18 May 2017].
Szántó, P., 2016. The 10 Ds of entrepreneurship. [online] Péter Szántó's Blog. Available at: https://blog.szanto.co/the-10-ds-of-entrepreneurship/ [Accessed 18 May 2017].