Innovation as a tool for transforming organizations

Originally published in Global Energy

Specifically, the Mexican Petroleum Congress 2019 was held in the city of León, Guanajuato and the central theme of the event could not be better selected: “Innovation to transform the oil industry in Mexico”, because it is a topic that requires continuous discussion to on the map of the ideal island in organizations and companies; and not the perfect map of the wrong island.

Innovation has always been the topic of the greatest importance for private companies and organizations. It is a theme that goes hand in hand with excellence. Innovative companies have teams of professionals of excellence and for them, they have a process that promotes from the recruitment and selection of staff. Choosing the best students, discovering them in the early stages of their careers, linking them to the organization early, with a vision of seedbeds and then incorporating them into the company, is essential.

Having a clear program that stimulates and encourages continuous innovation is the main thing and this should be linked to performance evaluation, recognition and incentives to ensure its permanence over time. The members of the organization must know this process and must be continuously informed of the opportunities that the company or organization give them to show their progress.

These opportunities include different types of events from presentations at internal technical conferences, to attendance at national and international conferences. The key question is: how to make innovation a continuous process that maintains excellence, a process that can be monitored to facilitate the consistent growth of people and organizations?

In 1990 Dr Peter Senge of MIT and a team of collaborators unveiled a concept he called: “Discipline as the basis of the organizations that are delivered.” Already at that time, it is sought to establish the practices that allow ensuring the effective growth of organizations in a consistent manner and with the mother and the flexibility necessary to have the capacity to respond and execute. This topic has been the object of studies and research by universities and companies, due to the importance of innovation in the strategy and productivity of organizations.

The evolution of business, market changes, continuous competition, new products and technologies, among others, the reasons for innovation become a value for organizations and high-performance levels. These controlled factors cause people and teams to question each other continuously, based on the monitoring and follow-up they make of their national and international environment.

However, there are companies that suffer from an adequate structure that allows them to be attentive to these strategic issues. In particular, companies that have strengths in their resource bases (resource-based), and that in many cases. receive those competitors, if they have similar products, and especially if they are consistent in terms of quality, time and costs.

China is an example of how innovation can transform into a country, understanding its importance to be competitive, and today it is a market leader in products ranging from steel production, textile and plastic manufacturing and more recently telecommunications.

In the oil industry, private companies have understood this issue very well, they know that innovation makes a difference when it comes to creating greater value in their business chain. In these companies the research and development of technologies and the creation and incorporation of new and best practices, the competitive media in the hydrocarbon market, where costs have become a matter of survival, due to variations in market prices

The sensitivity of the markets tied to the variations of the world economy and geopolitical tensions, the continuous increase in the supply of hydrocarbons worldwide, the frequency with the extraordinary increases in the domestic production of the United States, have suffered a continuous impact in the price of the barrel of oil or the gas molecule.

Precisely, the increase in production in the United States has been the result of a technological revolution, the product of continuous innovation in issues of well and termination architectures. Innovative processes that have been going on for more than 20 years, and that were triggered by the country’s energy needs, which imported more than 60% of its requirements since the 1970s.

Innovation processes in companies that are successful in their different fields have common characteristics that make them “organizations that learn continuously.” Dr. Peter Senge, the organizational researcher at MIT and his team of collaborators, conducted a study in 1990 evaluating more than 400 companies of different characteristics and types and reached that conclusion. These distinctive features include five (5) oral disciplines to implement and anchor the innovation process as an organizational practice. These are those disciplines:

1. The shared vision of the strategic objectives of the organization; This has to do with the participation of its members, in the creation of future scenarios.
2. Individual competence, the attitude and aptitude of each professional, and the ability of the organization to develop and enhance their skills.
3. Team Thought, the need to transform the individual thinking of the members of the organization into collective thinking, through effective communication, and work in multidisciplinary EMD’s teams, guided methodologically.
4. Systemic thinking, strengthen the effective interaction of EMD’s members through a common language in the organization, which facilitates the broadening of understanding of common systems and processes.
5. Shared mental maps, align the way of thinking of the members of the EMD’s based on the objectives of each project, without losing the strategic vision of the organization.

These five (5) topics are called disciplines because they require continuous work, learning methodologies and consistency of purpose day after day. These characteristics are what ensure innovation and make it a better practice and the way of doing things to keep organizations competitive all the time. For these reasons, innovation requires discipline: to define priority issues, to investigate what is required and to effectively implement them; otherwise, organizations will continue to improvise and expect different results without innovating, always doing the same and not being able to change trends.