Innovation by Attrition in the Oil and Gas Industry

I was in a meeting yesterday and was talking to someone about how seamlessly some oil and gas companies have embraced innovation - particularly in the public cloud, big data and analytics space, while others have been much slower to embrace and are still thinking old school, 20th century methods.

We discussed how hard it was to get certain organisations to think differently and we chatted about how best to change their minds about the new possibilities that the AWSMicrosoft, and Google public clouds have to offer.  After a lengthy discussion, we surmised that it was the leadership/management culture in companies that was one of the key issues.  The junior team members are familiar with and willing to embrace technologies such as HadoopAWSLambdaServerless ComputeAIWatson and a range of other tools and look at things from a new perspective. Conversely, we concluded that often in some organisations the senior team is comfortable with all of the old tried and tested ways of doing things and simply have no appetite to “take a chance on what is new”. They take a blinkered approach and may be unwilling to listen to or learn about innovative technology at the forefront of their industry.  There also seemed to be no correlation between size of company and willingness to embrace new innovations.

Diffusion of Innovation_Graph_Tape Ark.jpg

Maybe exposure to more innovation will start to change minds, or maybe… just maybe, seeing a problem solved in real time would break a taboos?  Let me give you an example.  There is a company in Perth that does hackathons called Unearthed – run by Zane Prickett and Justin Strharsky.  They set challenges that companies have been facing - sometimes for years, and give them to a mob of keen inventors to try and solve them.  I was privy to one of these hackathons for a mining company that was having problems with large rocks jamming their conveyor crushing system.  The shutting down of the conveyor system to correct the issue was very expensive - like hundreds of thousands of dollars per hour of down time type of expensive.... and the mining company could not come up with a solution after trying themselves, and was seeking a way to detect the large rocks when they were being carted to the conveyor, so they could be detected before they ended up ON the conveyor.  The problem had plagued the mining company for over a year.

A hackathon was presented with the problem.  The challenge was set to find a solution within 48 hours (over a weekend).  Hackers, engineers, physicists, geologists etc all gathered to hammer out a solution.  They broke into teams, ate pizza and drank coke, and on the second day presented their solutions.  One team surmised that the tyres on the truck (and their shape when a large rock was in the truck) held the answer, while others thought that they could use video streaming to detect when a large rock was dumped into a truck.  The winning solution was one that used an iPhone taped to the side of the truck to detect the presence of a large rock landing in it through its seismic signature (the amount of shaking the truck did when a large object fell into the truck) by using the iPhones accelerometer.  It was a very simple yet elegant solution that was low cost, easy to implement and ultimately saved the mining company a lot of money.  From that day on, the mining company embraced innovation, and saw the light in terms of thinking outside the square.  Thinking, for example, that it does not take only mining company people to solve a mining company problem. 

Oil and gas pipelines, like coronary arteries, carry a lot of important fluid and are things you never want to have a blockage in. So why can’t a cardiologist be the one who solves the problems for pipelines?  If augmented reality can help you design your home décor by showing you how that new coffee table will look in your lounge room, then why can’t it help you review your gas plants infrastructure?  If blockchain can be used to buy Crypto, then surely it can be used to track data assets from a seismic survey.  Thinking about other parallel industries and taking a minute to see how they solve problems is all it takes.

I said in the meeting yesterday that these companies are now innovating by attrition.  That is that they only innovate as fast as senior team members can retire or give in to innovation itself, and I do mean “Give In” almost reluctantly All I can say – is don’t be that guy.

If you have used a hackathon or similar – please let me know your story.

2 Comments

Guy Holmes

Guy is a graduate of Geophysics from Macquarie University in Sydney, and has completed a Masters of Business Administration (Technology Management) from Deakin University in Melbourne. 

Guy is a successful leader with a proven track record in the growth of start up and turn around businesses in the IT, medical and information management sectors.

Guy has extensive experience in the oil and gas, minerals, medical, and information management industries in Australia and the Asia Pacific and is a highly regarded entrepreneur.

Guy’s experience includes:

• Sourcing Venture Capital
• Acquisitions and Sales of businesses
• Commercial technology development
• Research and development for internal and external products
• International business development
• Product and service marketing, development, and management
• Multimillion dollar contract negotiations with government and private sectors (International and domestic)
• Development of business and marketing plans, strategy documents , and other executive level documents
• Industry leader in information management, data management, archiving strategies, legacy technology with a particular focus on the management of oil and gas and minerals information and data on a global scale.
• Operational management and refinement to seek maximum profitability
• Grant applications, financing arrangements, and seeking alternative funding

The results that Guy has achieved in his varied roles stand testimony to his abilities to:

• Manage organizational resources to achieve results
• Develop and drive technology solutions to achieve business goals
• Grow businesses that are both start-up and/or stagnant
• Successfully land, negotiate, perform and complete projects both domestically and internationally

Guy has been married for 24 years and has five children. He enjoys playing ice hockey, travel, mountaineering and spending time with his family and reading.