Oil and gas companies have not always generated a culture of innovation. When it comes to internal operations, plenty still depend on software written at the turn of the century, back when cellphones just made calls and Twitter wasn’t even an idea. Many are now adapting software as a service to meet certain needs, but the end result is a hodgepodge of disparate systems.

As is the case with many enterprise endeavors, the oil and gas industry needs custom solutions in a big way. With solutions tailored to specific operational models, companies can take advantage of applications that are simultaneously feature-rich and user-friendly on a commercial scale. However, innovation in this space is not without hurdles.

Removing the rust

About a decade ago, during the era of serious mobile and cloud solution proliferation, the global oil and gas market was facing a downturn as a result of the shifts in the economy. This resulted in a static acceptance of existing processes and systems. Making new hires and adapting to trends were less necessary. Now a new workforce is encountering an oil and gas industry that does not operate in the way it has been trained, and companies are forced to try to shoehorn paper or monochromatic interface systems into an iPhone and Facebook world. It’s a bad look.

Businesses that recognize the importance of modernization and innovation will be far more attractive to top performers in the industry, allowing them to recruit and retain a talent pool that is pushing the boundaries of what is possible in the 21st century.

Of course, there is innovation in the act of digital transformation. For decades, companies have been collecting terabytes of data, tracking everything from safety trends to what is happening in the field. Much of this information sits in antiquated databases or binders in storage units: too dense to parse and too costly to learn from. By tapping into artificial intelligence to analyze these data—coupled with new, custom systems created for delivering just-in-time reporting and predictive results—oil and gas companies can scale in previously unimaginable ways, with a return on investment that can translate into hundreds of millions of dollars in operational efficiencies.

As technology continues to advance, however, the cost of innovation expands. Like a drillbit left uncleaned in a pool of stagnant water, every moment that processes are left unattended increases the difficulty of removing the rust. The time to innovate is nigh.

Overcoming obstinacy

In many ways, the success of the industry rests on strategies dictated by conventional wisdom. When a process works well enough, executives abandon other options because they represent an additional cost, whether it is in the form of money, training time or some other investment. The phenomenon is understandably commonplace.

Today, though, technological advances have far outpaced the rate at which large businesses can adopt them. From innovations, such as virtual reality and robotics to the data collection capabilities provided by drones and wearables, modern technologies are extracting as much as possible from a day’s work—but only if companies figure out how to incorporate them into their existing processes.

As the oil and gas industry continues to experience a massive shift in its workforce, the keepers of the old processes are retiring. Innovation will only grow costlier as technology keeps advancing, and for the most competitive companies in the space, now is the time to embrace a new wave of innovation that will attract top talent, improve efficiency and further contribute to sustained success.

By gaining the insights of internal teams and outside experts, a company can more clearly define a process that will propel innovation. (Source: Rocksauce Studios)

 

Importance of internal innovation

When it comes to production, the same companies that are using manual entry processes are embracing innovations such as directional drilling and various fracturing methods. Not surprisingly, innovation is being used to achieve great successes in the field.

With any large company, the speed of adoption depends on working through internal bureaucracy and procurement processes—not to mention the politics of an old guard not yet willing to let go of the wheel.

One thing that oil and gas companies can learn from the entrepreneurial sector is how to enable the spirit of new ideas and allow innovation to happen in a safe environment. Companies need to be willing to take risks via pilots or tests, rather than requiring any new endeavor to have an accountant-certified five-year rollout plan before a single concept can be drawn out on a whiteboard.

Indeed, smart companies have become purposeful in focusing their culture on innovation. To capitalize on the shift, there are a few ways in which executives can embrace the three pillars of innovation and achieve more effective internal processes as a result.

1. Define a process. An innovative culture rarely takes root on its own. Instead, it requires a process like the one outlined in the Harvard Business Review’s “Innovation Stack.” It sounds counterintuitive, but a defined process actually frees innovators to create without the looming fear of damaging their career paths. The entrepreneurial market operates on incremental failure. When companies can effectively manage this failure, it’s more likely to lead to a “Eureka!” moment.

2. Create a platform. A process is useless without a platform for distributing it throughout an organization. Whether the platform is a website, a mobile app or a suite of tools based in the cloud, it must send proposed innovations through the process in which they are vetted, joined and shared within a company. The chosen platform must also maintain a level of transparency that encourages trust and collaboration, as these are both key ingredients to inspiring innovation that, if left out, will cause an effective transformation to stagnate.

3. Promote the above. In the same way customers cannot buy a product they are not aware of, people in an organization will not use a process or a platform they have not heard about. After investing in a process and platform, companies must promote them to spark the desired cultural shift. Adopting the latest software or gadgets and sending out an email will not move the needle on culture. Instead, elements like campaigns, messaging, companywide announcements and rewards are necessary to encourage employees to make waves in their careers.

Whether or not a company is innovating, it can be sure that its competitors are doing so. The best way to keep up is to inspire a culture that welcomes innovation instead of stifling it. The initial cost might be an incremental failure, but the payouts are processes that revolutionize the way companies of all sizes do business.

The three pillars of innovation are a great way to jump-start the shift toward innovation in a company, but they are only a start. Innovation takes time, but executives know that the best time to start a lengthy process with vast potential returns is today. Put it off, but in one short year, companies will likely wish that today had been the day they dove right in.