Here are three key lessons that came out of our discussion:
1. The need for speed
Digital innovation requires, by its nature, big changes in your thinking, processes and procedures.
This can be really difficult when you’ve done certain things in certain ways for a long time – and when those activities have paid dividends (literally).
But the digital world is a place where speed is of the essence just to maintain relevance, let alone market leadership.
It is a world where you need (in tech parlance) to ‘move fast and break things’. This shouldn’t cause you sleepless nights; the energy industry is quite often behind the curve when it comes to digital innovation.
But, looking on the bright side, that means you are not the first to take on these challenges and make these changes.
Other industries have been doing it for years and have done very well out it, or have kindly failed on your behalf.
Take our innovation methodology at SmplCo as an example. It is based on how Google Ventures does its prototyping. And if a company the size and complexity of Google can innovate this way, then you’ve got no excuses.
I understand this can be scary, particularly for those who have been burned before. We have come across folks in the energy industry who have lost their firms millions by trying to drive digital innovation.
But, with the right focus, speed is the antidote to this. Focusing on speed forces you to be agile, keeping things small and simple.
Applied properly, speed limits your exposure to risk and allows you to make rapid advances, generate immediate value, and get the buy-in you need to succeed.
And if that argument doesn’t convince you, then there’s the small matter of the energy shift, where policies and regulations are constantly changing. If you can’t adapt quickly, you’re toast.
But how can you build this speed? The answer is:
2. Don’t eat the whole elephant
Always start your digital innovations small and simple.
This will not only give you the aforementioned speed, it will ensure you remain focused, build momentum, and promote a succeed – or fail – fast culture. (The ability to fail fast can be just as important for your future prospects as succeeding fast.)
As you probably know, ‘small and simple’ isn’t the energy industry’s usual modus operandi.
Larger companies in particular tend to try to ‘eat the whole elephant’.
But it’s tough to fit an elephant in your mouth.
Instead, you need to make your elephant into very thin carpaccio and eat tiny pieces at the time. Otherwise you’re going to choke.
Here at SmplCo, we built our whole business model around driving a ‘small and simple’ approach to successful digital innovation. We’ve put our money where our mouth is on this one.
We prototype digital products in five days because we know bringing your vision to life fast – a having tangible evidence of that vision – offers you instant stakeholder alignment and buy-in.
This is crucial for successful innovation (and we have the case studies to prove it).
No need for perfection
Demand that whoever delivers your digital innovation makes the same promises we do. If they don’t, be suspicious that they’re just piling on the hours and the costs…
You don’t have to get everything right at the start.
The initial speed and focus we’re talking about is not about achieving perfection, it’s about starting conversations, getting the right people on-side, and putting you all on the same path.
Your initial goal should be a simple focus on a specific problem, which a specific audience needs solved, in a specific way.
That’s enough to start you on your journey to digital success.
But you’ll never achieve this if you try to eat the whole elephant, boil the ocean, or whatever metaphor works best for you.
Small, fast steps are the secret of successful digital innovation.
© Supplied by SmplCo3. Find your Magic Numbers
If you’ve any doubt about where to focus with digital innovation, this is it.
Time and again we see that if energy companies want to thrive in the green transition, they need to give colleagues effortless access to knowledge. We’re talking about everyone, from engineers to the C-Suite.
If you can take data that is scattered all over your organisation, turn that into useful information for domain experts, and then make that information into knowledge that is available to everyone – then you win.
It’s that simple.
Organisations that do this successfully:
- Work smarter: putting an end to manual, time-consuming tasks – particularly around reporting – freeing up experts to focus on high-value tasks, and easing skills shortages
- Optimise operations: using single sources of truth that foster co-operation and deliver transparent, accurate, performance measurement (throughout the whole supply chain)
- Create new opportunities: making the most of existing customer projects, creating new products & services, and discovering new business models (e.g. performance-based contracts)
Sounds good, right?
But, again, you need to start somewhere.
Where to start
The simplest thing to do is look for tasks that are important, but which require a lot of manual reporting.
Manual reporting leads to inconsistencies in reporting style and quality, meaning you get a highly subjective picture of what’s going on in your business.
The result is it’s very difficult to spot trends or optimise operations, and almost impossible for senior decision-makers to take strategic decisions about the company’s future.
And, on a practical front, people hate doing it. They waste loads of time that could be used productively elsewhere.
And it gets worse.
Maintaining these manual tasks ensures you will struggle to talent into your company, because they won’t stand for that style of work.
Manual reporting also means you can’t leverage awesome new digital technologies like AI, which rely on accessing structured data to produce analysis and insight (the kind of analysis and insight that everyone from engineers to the C-Suite can understand).
To solve this for maximum impact, you need to look at where this manual reporting is happening and then find your Magic Numbers.
These are the numbers within any given project that give you the insight you need to change behaviours and activities.
These are the numbers that can help you deliver miracles, using digital innovation.
Mud, glorious mud
An example of this approach in action comes from an energy client of ours that is one of the largest producers on the continental shelf.
They had a highly manual process for tracking mud which, if you’re not a mud expert/fan, is the lifeblood of any drilling operation.
It does marvellous things like maintaining the pressure of the borehole, and also it moves all the debris that you’re drilling up and takes it away.
These projects are often run by contractors and mud data comes from a lot of sources, which get gathered – by hook or by crook – into a mud report.
It’s all very manual and inconsistent. There’s no integration, no capacity to quickly see what’s in and out of scope, and no oversight of trends.
One mistake in this sort of environment can cost millions of dollars.
This scenario fitted the proposition we’re discussing perfectly: it combined a strategically important project with the problem of manual data collection.
That’s the recipe for Magic Numbers.
In this case, those magic numbers came from data showing whether mud in different wells was out of spec.
This was not only crucial information, it was only attainable through slow, manual reporting.
With the help of AI models to discover, collect and analyse data, we created a simple, traffic light-style dashboard, allowing our client to set parameters and quickly take action when the new platform showed the mud was out of spec.
Suspicious results
The wins came quickly from there.
Firstly, automated data feeds saved our client time equating to the annual work of four full-time engineers, just by collecting data automatically, rather than manually.
And not only did the firm now have a complete and objective view of what was going on – and could act quickly to rectify problems – the data showed something odd was going on.
The results seemed to show there was something wrong with the mud. It turned out they were being sold the wrong mud. It was old, pre-used mud being sold as new.
The energy firm couldn’t believe it. They sent the mud to Germany to a lab for testing. And – lo and behold! – there was indeed something serious going wrong.
They would never have known this if they hadn’t used digital innovation to make these Magic Numbers quickly and easily available to whoever wanted to see them.
You can apply this strategy to any project you have and quickly show ROI to your stakeholders. It’s about as sure fire a way to succeed with digital innovation that there is in the current environment.
As yet, no one has mentioned the irony of mud being used to clear the waters…
Michael Millar is co-founder and partner in SmplCo, empowering the energy industry to find new ways of working, improve performance, and drive the energy transition, using bespoke digital platforms, products and services.
N.B. No elephants were harmed in the making of this article.
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