Sustaining a culture of innovation is key to driving the energy industry, says this Houston expert

Guest column

While most corporations should be optimizing their company cultures, energy companies specifically need to move the needle on driving forward innovative culture for its employees. Getty Images

The prevailing economic environment has made innovation essential to gaining a competitive edge in the oil and gas industry.

Global economic shifts and the unstable oil market have been considerable factors inhibiting the advancement of innovation in the oil and gas sector. Oil prices have not significantly increased in the past four to five years, while investors and Wall Street hold corporate executives accountable for capital discipline.

In light of these trends, corporate culture and innovation are key factors that hold the potential to drive novelty in the next upcycle. To bring value to shareholders, the oil and gas industry needs to nurture an environment that fosters a radically innovative culture to create new product lines and markets, unique ecosystems, product content, and processes.

Culture from the top down

Organizational culture is one of the essential dynamics that drive innovation. Employee behavior helps influence and promote the acceptance of innovation as a fundamental corporate value. Organizations are therefore admonished to concentrate on fostering an innovative culture that allows the growth of new ideas.

This culture needs to be created by deliberate action on the part of leaders of industry or by indirect measures such as composition and institutional policy directions. A model of innovative culture which translates into cultural transformation emerges as a result of this deliberate action and institutional policy directions.

Various studies over the years have examined innovative culture models focused on cultural characteristics or factors. A comprehensive, innovative culture model that incorporates cultural traits and their determinants is reviewed in this contemplative piece.

Execution culture vs. innovative culture

In her book, "The Culture Map: Breaking Through the Invisible Boundaries of Global Business," Erin Meyer explains that "ambidextrous culture" is the concurrent search of flexibility and alignment at a business unit/sector which is linked to several organizational outcomes including improved performance and innovation.

This ambidextrous culture can be divided into two broad categories: Execution culture and innovative culture. Execution culture is a working environment that is more process- and task-driven to get things done. The oil and gas industry has typically favored the execution culture, where there is a central decision-maker at the head of the table. Research and recommendations on pertinent matters are typically presented to decision-makers who sit through a PowerPoint presentation. Subsequently, a decision is made based on the facts presented via PowerPoint presentation.

One critical demerit of this setup is that it usually leans towards low-risk conservative judgment. The executive lifestyle has worked in the past in the oil and gas industry due to the high fixed cost, and the "failure is unacceptable" approach in the industry.

With new technologies such as 3D printing, predictive analytics, machine learning, and deep learning, one can test some ideas or thoughts through rapid prototyping in a lab setting to test their hypothesis. Therefore, this type of culture as a sole approach to decision-making in the industry may need to be reconsidered.

Meanwhile, innovative culture is a work environment where leaders encourage and nurture unorthodox thinking in approaching problem solutions and applications. If the energy industry leaned more toward this style of culture, it would help foster innovation and accelerate the innovation landscape in the industry.

Innovative culture is a more design-oriented approach that generates a large pool of options and also incorporates a visual thinking framework. It enhances a creative mode for the audience, and everybody in the company ends up being a decision-maker. This type of culture fosters open innovation, eliminates the fear of expression, and pushes for more collaboration and creativity in the ecosystem.

According to a recent survey done by Accenture Strategy, 76 percent of leaders say they regularly empower employees to be innovative, while only 42 percent of employees agree. This shows an apparent disparity in more than the perceptions of employers versus employees and the belief that innovative culture is not promoted by middle management. This barrier can be broken down by instituting and enforcing an innovative culture.

Staying agile in a transforming world

The world has changed, and it will continue to transform. Various factors are disrupting traditional methods of business management across the globe, and organizational behavior is being impacted significantly. For an organization to be competitive globally, it requires innovation and creativity.

The rate at which businesses are facing competition requires agility. Employees are pressured to give their best and to come up with new ideas at a level even beyond some of history's greatest minds. For many, uncertainty and insecurity abounds. The fear of being made redundant and a resulting lack of trust prevents creativity among employees.

Trust, productive gameplay, and fun — critical components of an innovative culture — can spark creativity and increase global competitiveness. Due to the recent downturn, most teams are burdened with the same amount of work, which was meant for double or tripled their workforce and are still expected to perform at their peak capability. They need the right conducive environment to function.

Implementing action

While the energy industry should avoid trying to copy innovative practices from technology companies, oil and gas companies should review possible case studies that can be incorporated in fostering an acceptable culture for millennials to be attracted to the industry.

Presentation is important

Take a look at your marketing materials, for instance. Skip the stereotypical image of the macho oil guy on a rig operating the brake handle and showcase how the industry is adapting open innovation across sectors such as using predictive analytics and rapid prototyping to help design a safe working environment. Showcasing the conducive culture we experience in oil and gas, which challenges us to think outside the box and solve the world's energy problems will be an excellent way to create opportunities internally in companies and also attract and retain talent from different backgrounds and industries to help solve the world's energy problems.

Consider flexible work initiatives

To help establish and foster an innovative culture in oil and gas, the industry needs to embrace virtual and remote working environments, retraining and refresher courses to keep employees' skills relevant to solving problems, leaders setting a positive example on work-life balance and cutting down or avoiding long-distance travel via virtual meetings. Others essential pointers to consider are, giving employees the freedom to be themselves at work, leadership or management having a positive attitude towards failure, allowing remote work on days on which employees have personal commitments, networking events with company leaders scheduled during office hours, having an open channel for the report of sexual discrimination/harassment incident(s) to the company, among others.

I'd like to close with a quote from another influential book, "The Innovator's Dilemma," by Harvard Professor Clay Christensen. He writes, "When an organization's capabilities reside primarily in its people, changing to address new problems is relatively simple. However, when the capabilities have come to live in processes and values and especially when they have become embedded in culture, change has become extraordinarily complicated."

Establishing a uniquely innovative culture within the energy industry will be a great foundation going forward, for spurring progress in the oil and gas sector.

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Nii A. Nunoo is senior associate and management consultant within Strategy and Energy Core Operations at KPMG.

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Holiday shopping is in full swing, and the bane of everyone's existence — especially during a pandemic — is shipping.

For smaller and mid-sized local businesses, that means paying big-business prices to a national shipping company. And for consumers, it's waiting a week or more to receive your item, even if you paid for shipping.

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"Amidst COVID-19, it is more important than ever to shop local and support our small businesses," says Lalamove's international managing director, Blake Larson. "We look forward to providing our services to Houston businesses in need of a fruitful start to the holiday season."

Unlike other delivery options, Lalamove delivers everything from food to small packages to bulky furniture within the same day, and it operates on a base-plus-miles pricing model with no commissions.

Deliveries in a sedan start at $8.90, with $1 per additional mile. SUV pricing has a base fare of $16.90 plus $1.25 per mile. Other same-day delivery options with national shipping companies can be well over $100 dollars, depending on the size and weight of the package.

Neighborhood-to-neighborhood sedan pricing is more affordable than traditional same-day shipping: Museum District to Midtown is $9.90, Midtown to The Heights is $14.90, and Northside to East Downtown is $17.90.

This also contrasts with food delivery platforms that charge restaurants 15-30 percent commission on the entire order; with Lalamove, the delivery charge for a $25 meal is the same as a $150 meal.

Users and businesses can place an order via the Lalamove app or on its website, which is available 24/7. When placing your order, you are instantly matched with a driver and their car, based on your delivery needs. You can deliver to (or order from) up to 20 locations in one order with the multi-stop delivery feature, and can schedule a delivery in advance or book for right then.

Lalamove app Using Lalamove is simple. Graphic courtesy of Lalamove

Shoppers can request Lalamove's services with local boutiques and stores that don't normally offer delivery, and get instant gratification (and a much smoother holiday season) with same-day delivery.

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To help small businesses provide fast, reliable delivery throughout the holidays, Lalamove is offering $10 off with promo code LACMHOU10. Business owners can try out the service, or customers can take advantage of Lalamove if they need delivery.

City offers internet vouchers to low-income Houstonians amid pandemic

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It's an increasingly digital world, and COVID-19 has just accelerated that trend exponentially. Yet, there are still tons of Houstonians operating offline due to socioeconomic inequities.

The Houston City Council recently approved a $624,960 program with funding from the CARES Act to help bridge this gap. The program, by Mayor Sylvester Turner's Health Equity Response (H.E.R.) Task Force in partnership with Comcast, will provide 5,000 internet vouchers to low-income Houstonians. Applications for the vouchers are open from now until December 20, 2020, and will be distributed on a first-come, first-served basis. They will provide internet for one calendar year.

"This pandemic has highlighted the importance of quality internet service particularly for those vulnerable populations who must stay at home to stay safe," says Mayor Sylvester Turner in a news release. "This program will provide a lifeline for citizens that have struggled through the pandemic without internet access and a way to stay informed, connected and safe during these challenging times."

To be eligible for the voucher, applicants must live in the city of Houston and have a Comcast serviceable address, as well as meet two personal sets of criteria. First, they must prove that their total household income before February 2020 was lower than 80 percent of the area median income, and second, they must either be over age 65, a person with disabilities, households with children less than five years of age, or a person between 16-24 who is not currently enrolled in school or participating in the workforce.

"During this unprecedented time, it is vital for Houstonians to stay connected to the Internet — for education, work, and personal health reasons," says Comcast's Melinda Little, director of Government Affairs in the Houston Region, in the news release. "We're proud to partner with the City of Houston and Mayor Sylvester Turner's Health Equity Response Task Force to help keep Houstonians connected through our Internet Essentials Program."

While there are existing internet access programs, this program, which is complementary to the city's Computer Access Program, is specifically targeting critical groups that have been overlooked.

"The shift online in everything from grocery shopping to accessing healthcare has been an additional barrier that Houstonians with disabilities have been forced to confront as a result of COVID-19," says Gabe Cazares, director of the Mayor's Office for People with Disabilities, in the release. "Thanks to Mayor Turner's commitment to equity and accessibility and the City Council's support, this program will breakdown that barrier by providing in-home internet access for qualifying Houstonians with disabilities, enhancing their independence and self-determination."

Shoppers in these Houston suburbs are among biggest holiday spenders in U.S.

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It appears that delivery drivers (and Santa) will be hauling sleighs full of gifts to homes in The Woodlands and Sugar Land this holiday season.

A new study from personal finance website WalletHub ranks The Woodlands and Sugar Land sixth and seventh, respectively, in the country for cities with the biggest holiday budgets. WalletHub estimates that consumers in The Woodlands will ring up an average of $2,729 in holiday spending; Sugar Land residents will spend $2,728.

Other Greater Houston-area suburbs on the list include League City, No. 15 at $2,501, and Missouri City, No. 98 at $1,264.

Elsewhere in Texas, Flower Mound came in second for holiday spending; residents there will ring up an average of $2,973. Only Palo Alto, California, had a higher amount ($3,056) among the 570 U.S. cities included in the study, which was released November 17.

The five factors that WalletHub used to come up with budget estimates for each city are income, age, savings-to-expenses ratio, income-to-expenses ratio and debt-to-income ratio.

Flower Mound consistently ranks at the top of WalletHub's annual study on holiday spending. Last year, the Dallas suburb came in at No. 3 (budget: $2,937), and in 2018, it landed atop the list at No. 1 (budget: $2,761).

Aside from Flower Mound, five cities in Dallas-Fort Worth appear in WalletHub's top 100:

Richardson, No. 36, $2,002
Frisco, No. 53, $1,684
Plano, No. 59, $1,594
Carrollton, No. 71, $1,492
North Richland Hills, No. 95, $1,303

Two cities in the Austin area also make the top 100: Cedar Park at No. 73 ($1,472) and Austin at No. 99 ($1,259).

Austin's No. 99 ranking puts it in the top spot among Texas' five largest cities. It's followed by Fort Worth (No. 306, $718), San Antonio (No. 394, $600), Dallas (No. 399, $596), and Houston (No. 436, $565).

Harlingen is the most Scrooge-y Texas city: The estimated $385 holiday budget puts it at No. 560 nationwide.

Overall, Americans predict they'll spend an average of $805 on holiday gifts this year, down significantly from last year's estimate of $942, according to a recent Gallup poll.

Outlooks for U.S. holiday retail sales this year are muted due to the pandemic-produced recession. Consulting giant Deloitte forecasts a modest rise of 1 percent to 1.5 percent, with commercial real estate services provider CBRE guessing the figure will be less than 2 percent.

"The lower projected holiday growth this season is not surprising given the state of the economy. While high unemployment and economic anxiety will weigh on overall retail sales this holiday season, reduced spending on pandemic-sensitive services such as restaurants and travel may help bolster retail holiday sales somewhat," Daniel Bachman, Deloitte's U.S. economic forecaster, says in a release.