Comments: Companies that Innovate

Abstract

Editor's column The oil and gas industry is a leader in high-tech innovation, whether adapting older technologies and techniques or creating and applying new ones. JPT has been highlighting many of these technical advances over the past several months, from hydraulic fracturing improvements, to advances in subsea processing, automated drilling, and other technologies. SPE along with JPT is also putting a special focus this year on companies and individuals who believe they have come up with promising advances in technology and that deserve attention from the industry at large. JPT is currently soliciting these ideas for future publication (see www.jptonline.org to find out more about submitting new technology ideas for publication in JPT). Now a new book, The Innovator’s DNA, shines a light on innovative companies and the people who run them and why some companies do better than others in this regards. The book is based on an eight-year study by Clayton Christensen, a Harvard Business School professor; Jeff Dyer, a professor at Brigham Young University; and Hal Gregersen, a professor of leadership at INSEAD, an international graduate business school and research institution. They conclude that there are particular skills that define those who run innovative companies, skills that can be learned or adapted. They summarized their findings in a recent issue of Forbes and helped create a list of the most innovative companies operating in the world today. Here are the skills they say define “disruptive innovators”: Questioning allows innovators to challenge the status quo and consider new possibilities. Observing helps innovators detect small details in the activities of their customers, suppliers, and other companies that suggest new ways of doing things Networking allows innovators to gain radically different perspectives from individuals with diverse backgrounds Experimenting prompts innovators to try out new experiences, take things apart, and test new ideas Associated thinking—drawing connections among questions, problems, or ideas from unrelated fields—is triggered by questioning, observing, networking, and experimenting and is the catalyst for creative ideas. Several oil and gas firms made the list of the top 100 innovative companies, including FMC Technologies, Schlumberger, China Oilfield Services, Cameron, Tenaris, and Halliburton. Others on the list are linked to the energy industry through the products they offer, including Praxair and Infosys. FMC scored highest among oil and gas firms, ranking 18th, while Schlumberger was second at 27. The authors tried to define those companies that have an “innovation premium,” a metric defined as the proportion of a company’s market value that cannot be accounted for from cash flows from its current products. The list was limited to companies with large market caps and those that are publicly listed, but the authors maintain that these organizations have innovation embedded in their company philosophies and in their people, and that that sets them apart from competitors.