Taking global innovation to Stavanger

Looking forward to welcoming global strategy & innovation expert, Rita McGrath to Stavanger. She’ll be speaking at Statoil’s Competitiveness Day at the end of March.

Rita’s globally recognized as one of the top thinkers in strategy and her latest book has been awarded “Strategy Book of the Year” on several occasions. Rita’s key message; companies need to learn how to innovate and change even faster.

We are also delighed to have Rita as member of our global advisory board.

RIta’s first business trip to Norway comes at just the right time for an industry trying to innovate outside of its traditional core business. This is really taking global innovation to Stavanger.

 

We also recommend her excellent talk at the Global Peter Drucker Forum in Vienna.

 

 

 

 

Taking global innovation to Stavanger

Post-ONS 2014; Now What?

“Changes” the theme from ONS2014 was loud and clear,
But “Changes”, how and excactly what?

ONS 2014 is a few weeks away. This years’ theme, “Changes” was clear across speakers, conference tracks and all media fronts. Everyone, it seemed, agreed on the need for change.

But now, a few weeks later, where does the industry begin?

Finding growth or cutting costs?

“The cure for Apple is not cost-cutting.
The cure for Apple is to innovate its way out of its current predicament”

– Steve Jobs, 1999

The big question for any organization in the oil and gas industry; what’s our strategy moving forward? Should we be cutting costs; streamlining operations, making ourselves more efficient and show a stronger financial return in the short-term? Or should we be developing a more innovative organization, developing the people, culture, strategy and processes to truly stand out as a leading, innovative company?

The problem is, most executives in large companies today have the tools and training (and incentives) to cut costs. Yet, as Josh Linkner states; “I also realized how creatively bankrupt most companies are today. With a constant focus on cost cutting, efficiency gains, and top-down control, too many organizations have lost their mojo.”

Innovation: only getting harder

At ONS, “Innovation” was on everyone’s lips. Some of it marketing, much of it genuine. But what most people really talked about was usually “Technology innovation” or “Process innovation” – and then, even incremental in nature.

On our earlier work with Statoil, Aker Solutions, GDF Suez, Halliburton and other key industry players, we’ve identified an industry with a driving energy (!) around these two elements of innovation, “Tech” and “Processes”. While both are crucially important, these two areas are only two of the nine levels of innovation.

Using the Innovation Pyramid to understand innovation

The Innovation Pyramid - ONS2014

 

 

 

 

 

 

 

The Nine levels of innovation

  1. Design & marketing innovation

The external facing design, marketing and communications. This is where most marketing, ad and design-studios have their expertise. While creative in nature, innovation at this first level rarely induce significant change on the organization as a whole.

  1. Product innovation
    New or improved products. Much innovation here centers on incremental product extension.
  2. Service innovation

Developing new services is for many the “next big field of innovation”. Much research is currently going into service innovation development.

  1. Markets, customers and channels innovation

The go-to-market strategy offers chance for innovative thinking across markets, segments, customer profiling and of course channels. Today we’re seeing a significant growth in digital channels across established industries. Any retailer today needs to understand and innovate for a local-global, omnichannel world.

  1. Technology innovation

Developing and putting new technologies to use. The Norwegian oil & gas industry recently ranked #40 globally in putting new technology innovation to actual use, yet tech innovation still receives the largest focus of innovation.

  1. Process innovation

Changing how we work requires process innovation. Much of Statoil’s STEP program is focused on “simplifying the way we work”

STEP - Statoil technical efficiency program

7. Management innovation

Changing the way we build and lead organizations and networks requires management innovation. It is a little known and understood area of innovation, but rapidly gaining acceptance, through excellent work by Gary Hamel, Julian Birkinshaw and many others.

For the industry, Management innovation is a requirement for significant change, and something also Statoil addresses in its’s STEP presentation.

STEP - Management Innovation -

  1. Business model innovation

Business model innovation allows us to change the revenue models, change the cost structure and eventually take a system-level perspective on all the aspects of your business model. Industries facing significant disruptions today, like media, newspapers, education and A multitude of business model perspectives exists, with Innosight, Girotra  Business Models Inc and Strategyzer offering the most common ones. Today, most firms also understand the need for a portfolio of business models and the tools, like Three Levels of Business Models, to make this happen.

9. Industry innovation

Industry innovation is probably the least understood and by far the most challenging aspect of innovation. How do you get started on creating a new industry? On radically upsetting and changing the norms, mental models and dynamics of an established industry? Disruptive cases like Nokia and Kodak shows us how strong established industry norms can be, as most significant innovations come from outside the established industry.

Much of the talk at ONS, while only implicit in nature, implied significant innovation required at both a business model, management and industry level. As we know from working with the Innovation Pyramid across organizations and industries, these three levels of innovations are significantly more difficult to succeed in.

For the oil & gas industry, the key players are really leading a move to Management innovation, Business model innovation and significantly, industry innovation. The talk at ONS 2014, was mostly “Tech” and “Processes”. But from our point of view, the story emerging is much more on the more challenging levels of innovation. This is crucial, for the ability to succeed, requires far more work and far stronger innovation efforts to succeed at the lower three levels of the Innovation Pyramid.

To succeed, new tools, new thinking and new collaboration models, revenue models, cost-sharing models, industry incentives and industry dynamics will be required.

Recommended thinking ahead

For the industry, moving forward, a significant level of change is to be expected.  This is also the core of our Executive education program, ‘’Strategic Innovation in the Global Oil & Gas industry”, run at BI – Norwegian Business School. In this program, we recommend the following four management books to best understand the forces of change, innovation and leadership.

The End of Competitive Advantage
Our #1 recommendation for strategy executives today.

Strategic Transformation: Changing While Winning
A fantastic piece of research on how to lead transformation while still running your old core business.

What Matters Now
On the challenges of leading in highly innovative and disrupted environments

Accelerate: Building Strategic Agility for a Faster-Moving World
Leading change – faster. The latest work by Change management expert John Kotter.

We feel strongly, the combined ideas in these four books, can help lay the foundation for change and build a roadmap for more innovation, faster change and better handling of multiple levels of the Innovation Pyramid going forward.

Because one thing is sure, looking back at ONS 2014, the industry will surely need it.

Note:
Early next month I will be speaking at a strategy and leadership session at Statoil. I’ll be sharing the stage with top Statoil executives presenting the next steps of the STEP program. I’ll be looking forward to learning more how Statoil will handle multiple levels of innovation here.

Post-ONS 2014; Now What?

What a great week; thanks everyone

An incredibly exciting week is drawing to an end. I’m on the ferry, heading back home, reflecting on the past five days and the number of engaged and passionate people I’ve met – people that all desire to drive change, create innovation and build a better future. What an awesome week.

Monday saw me teach “Facebook IPO” to our third year Bachelor students. The morning session started off with “understanding Facebook’s Business Model”. Using the Business Model Canvas, the students attempted to map out the key drivers of Facebook’s revenue structure and overall business model. Challenging exercise, but thanks to the recent IPO filings, more light is shed on this extremely successful company. Imagine, started eight years ago, and today it has one of the highest profits per employee of any company in the world.

Our afternoon session took us through “understanding Facebook’s IPO communication process”. Using recent press clippings, news reports and YouTube-videos, we were able to build a picture of the ongoing battle between Facebook stakeholders with massive incentives to drive a success story, while a critical press and skeptical analysts attempted to balance the picture. My personal favorite was WSJ’s “Five Concerns about Facebook IPO”, concluding that the company would require an “adult CEO” to grow as a public company. Hahaha. That’s Apple and John Sculley all over again. Zuck; stay CEO, stay true to the Hacker’s Way.

Tuesday brought a full class of first year students in Organization and leadership. There truly are the leaders of tomorrow, and our Business School owes them the best it can give. We started off with a slideset concluding “This Course is About You and Your Leadership Development”. Divided into teams of five, the students will work on various learning and development challenges throughout the semester.

Wednesday morning brought kick-off for a ten day, nine months, leadership development program of a global oil and gas company. Opening day focused on bringing innovation thinking into the leadership role. Using extensive material from strategic innovation and The Management Innovation Exchange, the 23 executive students got a solid mental challenge to stretch their existing mental models of their own leadership roles.

Wednesday afternoon (some would say evening) I had the pleasure of teaching our course on ‘’Innovation and Entrepreneurship’’ for 25 Bachelor students. After an initial set of student presentations (major room for improvement), we set off trying to understand how Norwegian firms can learn from Apple’s innovation processes. Using the movie “Pirates of Sillicon Valley”, the student got a good grasp of the founding days of both Apple and Microsoft. Great movie and highly inspirational for tomorrow’s innovators.

Thursday morning it was back to the oil & gas executives, this time together with a BI teaching colleague. Our second day focused on personal reflection, communication styles and coaching training. It was a great start to our year-long program, and I am truly looking forward to working with these executives for our ten day leadership training program.


Thursday afternoon was an event I had been looking forward to for some time; the Innovation seminar at Young in Statoil. These guys are the next generation leadership at Statoil, and getting invited to give a keynote presentation on innovation is a great honor. My two hour talk covered “Dream Bigger”, “The Dinosaur and the Pirate” and how you can create management innovation in your own team or department. Read more about the Innovation Seminar here.

Friday morning I was on the ferry to Haugesund for Haugesund Næringforening ‘s lunch seminar. I was invited to give a keynote on Apple and what Norwegian firms can learn from Apple’s innovation success. You can read more about the keynote here.

Now, sitting on the ferry back home, allows for reflection on great learning, great conversations and truly inspiring encounters with people of all ages and all backgrounds trying to change their business models, and their organizations for the better.

My best advice, “Dream Bigger” and “Just do it”.
To quote Walt Disney, “It’s kind of fun to do the impossible. Remember, it all started with a dream”.

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Young in Statoil Innovation Seminar

I recently had the great pleasure of giving a keynote presentation to the next generation of leaders at Statoil. The topic: innovation, including management innovation, Dream Bigger and Pirate Thinking.

A great crowd of 100 – 120 young Statoil employees – all next generation leaders at the company, joined the two hour session. My initial keynote presentation gave way to some superb questions from the audience. It is fantastic to be able to spend time and listen to these everyday challenges of young executives re:thinking fast track processes and young project leaders dealing with existing dinosaurs and trying to embed their own pirate thinking and really drive the innovation efforts in Statoil.

I hope my contribution can drive some more pirate thinking. Following initial impressions, both the Twitter feed, Linkedin and Facebook accounts lit up with comments, feedback and discussions. Thanks, everyone, for the input and energy (see some Twitter comments below).

A handful of Twitter comments.

Young in Statoil Innovation Seminar

Bravo, Statoil

One of our great passions is management innovation. Improving, reinventing, rethinking the role of leadership in modern organizations. Reimagine the fundemental principles of how we redesign the notion of “leaders and followers”. Redesigning organizational structures and management control issues in the age of social media. and unleashing the power of innovation in established organizations.

This is also the mission of Management Innovation Exchange, out of London. So, it’s a great pleasure to find a newsletter in my inbox detailing one angle of Statoil’s ongoing management innovation.

Bjarte Bogsnes tells the story of a radical overhaul of management processes at Norwegian oil & gas company Statoil—including abolishing the straightjacket of traditional budgeting and kicking out the fiscal calendar—to create a more dynamic, flexible, and self-regulating management model. Read the story »

Great work, great story and a great example of management innovation that easily deserves more attention. Bravo, Bjarte. Bravo, Statoil.

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