Scaling Innovation across the O&G enterprise-I

Innovation is a necessity and is increasingly becoming a part of our core business. Most of the enterprises have undertaken an innovation program in some form or the other and are working primarily on business improvements utilizing emerging concepts like innovative platforms augmented with concepts like mobility, analytics and machine learning. However, These programs are still running either in a remote lab in their headquarters or at one chosen asset which poses the lease risks when it comes to delivering success.

What is needed.

The need of the hour is to take the next step and make it a core part of their business, to scale these programs up to the enterprise level so they can bring the change in their business as expected. This needs to be done in a systematic manner by understanding the nature of the innovation and its needs. The two primary drivers when understanding an innovation initiative/ project are

1. Ease of iterations
2. Possibility of limiting customer reach

If its easy to bring in improvements in the project quickly its always better to launch a Minimum Viable Product (MVP), check the market reaction, gather feedback and get back to the customer. We can continue this like a cycle so we can bring in improved versions of the product periodically and continue to build trust with the customers for being an innovative shop.

The other factor is to understand if the innovation can be done over a small scale and then moved up to the wider market. We can limit the initial outreach based on geography or a business segment or even a particular industry. If the initial outreach can be limited, it allows the company to gather feedback at a smaller scale and launch the large scale transformation in the future when the product is armed with all expected features.

Scaling Strategies for the Innovation

Based on the above, we can categorize the scaling strategy for innovation into four broad categories:

1. The ones which can both be iterated easily and can have a limited rollout. These products can easily be launch over and over again with a version having additional features. This is called a MVP rollout for example a field enablement software solution which can start with basic automation features like enabling field activities through a mobile app and coming up with better versions as per the feedback received from the field workforce. Improvements could be providing additional data points to have a enterprise wide view for the field workforce.
2. If the iterations are possible but rollout cannot be limited, the company will need to carry out a MVP Launch which requires them to pack the initial version with all the features and get some initial feedback from the initial set of customers before going all out in the market. An example could be a market place for water or oil hauling in the industry. We can launch the product to the wider market and add features as and when feedback is recieved, This could also be a conscious strategy to limit the initial investment and gauge the market demand before launching with all features into the market.
3. The third category belongs to the initiatives which need a full fledged product but the initial customer base can be limited. We can call this category as a Polished Limited Rollout. The limitation with such initiatives is that you cannot show your innovation to be any less than the complete product and as a result are limited by the constraint of working on all the features you intent to add in the product/ service. One such example from the O&G industry could be from the retailing side. An O&G downstream company might want to launch a new look into their retailing stores or gas stations with added features. However, they would want to limit the initial investment into a limited geography so they can understand the market feedback before going full scale and converting all of their stores or gas stations. In Upstream, this can be done in a control room for one asset and moved on to the others only when initial feedback is gathered.
4. Finally, if you have to launch a product for the entire customer base with all the intended features it is labelled as a polished launch. The product lifecycle of such products is typically long and has to undergo various approvals internally as well with external agencies before any new feature can be added into them. Additionally, the manufacturing process is long as well which adds into investments as well as timelines. They can also not be limited in terms of the customer base since they introduce a new core business process change in the Industry. One such example could be a new tool to capture downhole data being launched by one of the major service providers.Most of these tools are manufactured after years of research and are tested internally before launching into the market. After so many years of hard work, regulatory agency approvals and huge investments the company cannot limit the customer base. Sometimes, limiting the initial launch might not even help as some features work in one region while they dont in the other regions and since the lifecycle and investments are high it makes sense to go to market with the best possible product in all the regions or segments.

Understanding the innovation initiative and placing it in the right category can help companies decide the future course in a very systematic way and create a vision for the positive changes expected from the innovation.

Conclusion

Innovation Strategy would completely change based on the category of the product. Most of the innovation projects never make it to the larger organization due to lack of the right approach to scale it up both in terms of functionalities as well as adoption. Organizations are always ready to invest in innovation projects but end up not justifying investments in the wake of different needs of every innovation project/ initiative. The need of the hour is to approach it with the appropriate strategy and also building a path for adoption of the change.