Startups Critical to Developing Culture of Innovation

Stephen Whitfield, Senior Staff Writer | 

Innovation is critical to survival in the oil and gas industry, and the president of Chevron Technology Ventures (CTV) said that developing relationships with startup companies is key to navigating a rapidly changing technological ecosystem. At a presentation held by K. Carpenter Associates (KCA) and Pannell Kerr Forster of Texas (PKF Texas), Barbara Burger outlined a plan for corporations to develop a culture of local innovation by building a startup network.

Burger said the key to establishing a culture of innovation is engaging the startups, and that requires a company to not only thoroughly explore every new technology available, but to understand what it needs to be successful well enough to be able to filter out new technologies that are not germane to their business model. She said CTV says no to most startups who approach them in part because its technology scouts are good at seeing things through the filters of their business models.

However, Burger acknowledged that those filters change frequently over time as the needs of the companies change.

“It’s not just enough to find them,” she said. “We need to filter them out for things that Chevron is interested in today and tomorrow, but those things change over time. For us, they’ve changed dramatically in the last 3 years. There is so much technology that is available to help us out in the Permian, for instance, and that need didn’t really exist when oil was $100 a barrel.”

One such filter is Chevron’s existing network of suppliers. When presented with a technological challenge, Burger said CTV first looks at its established suppliers, and if any of them can deliver an adequate solution, it will not look for a startup. Because of this, she said startups often establish themselves within what she termed the “white space” of what organizations like Chevron need and what their suppliers can offer.

“The startups are looking for money. They’re looking for customers. They’re looking for feedback on their innovation,” Burger said. “They will never survive if the established guys can do exactly what they do. They just have too big of a bench, and they know that, so they’re looking for those white spaces.”

If a startup is promising, Burger said there are still a lot of mechanisms a company needs to have in place to be receptive to it. She said the innovation mechanisms within a startup are much different from Chevron’s oilfield service companies or its research and development teams, and in scouting for startups it made sure to have processes in place that were fit-to-purpose for startups that allows them to flourish while still adhering to Chevron’s normal processes.

For example, Burger said CTV has looked at speeding up its processes for writing and agreeing to contracts with startups. It also has different programs for funding startups, including milestone-based payments. Burger said that, after signing a contract with CTV, the company maintains open communication with startups on the challenges it may face in implementing a new technology. She said that, while the company has a lot of opportunities to install new systems in its operations, it often lacks the bandwidth to do so easily: Installation often means changing workflows, and because of this she said it is sometimes easier to live with a less-efficient technology.

“It comes down to the business needs, it comes down to the pain points of an organization, it comes down to confidence in the value propositions we’ve given them,” she said. “It’s a lot of change management, and the closer we’ve gotten to the digital technology, the more our work involves change management. You’re not just putting in a new piece of equipment, you are changing workflows. We have to think a lot about how to introduce technologies in a way that the organization is receptive to.”

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