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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Texas university to lead new FAA tech center focused on drones

taking flight

The Texas A&M University System will run the Federal Aviation Administration’s new Center for Advanced Aviation Technologies, which will focus on innovations like commercial drones.

“Texas is the perfect place for our new Center for Advanced Aviation Technologies,” U.S. Transportation Secretary Sean Duffy said in a release. “From drones delivering your packages to powered lift technologies like air taxis, we are at the cusp of an aviation revolution. The [center] will ensure we make that dream a reality and unleash American innovation safely.”

U.S. Sen. Ted Cruz, a Texas Republican, included creation of the center in the FAA Reauthorization Act of 2024. The center will consist of an airspace laboratory, flight demonstration zones, and testing corridors.

Texas A&M University-Corpus Christi will lead the initiative, testing unstaffed aircraft systems and other advanced technologies. The Corpus Christi campus houses the Autonomy Research Institute, an FAA-designated test site. The new center will be at Texas A&M University-Fort Worth.

The College Station-based Texas A&M system says the center will “bring together” its 19 institutions, along with partners such as the University of North Texas in Denton and Southern Methodist University in University Park.

According to a Department of Transportation news release, the center will play “a pivotal role” in ensuring the safe operation of advanced aviation technologies in public airspace.

The Department of Transportation says it chose the Texas A&M system to manage the new center because of its:

  • Proximity to major international airports and the FAA’s regional headquarters in Fort Worth
  • Existing infrastructure for testing of advanced aviation technologies
  • Strong academic programs and industry partnerships

“I’m confident this new research and testing center will help the private sector create thousands of high-paying jobs and grow the Texas economy through billions in new investments,” Cruz said.

“This is a significant win for Texas that will impact communities across our state,” the senator added, “and I will continue to pursue policies that create new jobs, and ensure the Lone Star State continues to lead the way in innovation and the manufacturing of emerging aviation technologies.”

Texas Republicans are pushing to move NASA headquarters to Houston

space city

Two federal lawmakers from Texas are spearheading a campaign to relocate NASA’s headquarters from Washington, D.C., to the Johnson Space Center in Houston’s Clear Lake area. Houston faces competition on this front, though, as lawmakers from two other states are also vying for this NASA prize.

With NASA’s headquarters lease in D.C. set to end in 2028, U.S. Sen. Ted Cruz, a Texas Republican, and U.S. Rep. Brian Babin, a Republican whose congressional district includes the Johnson Space Center, recently wrote a letter to President Trump touting the Houston area as a prime location for NASA’s headquarters.

“A central location among NASA’s centers and the geographical center of the United States, Houston offers the ideal location for NASA to return to its core mission of space exploration and to do so at a substantially lower operating cost than in Washington, D.C.,” the letter states.

Cruz is chairman of the Senate Committee on Commerce, Science, and Transportation; and Babin is chairman of the House Committee on Science, Space, and Technology. Both committees deal with NASA matters. Twenty-five other federal lawmakers from Texas, all Republicans, signed the letter.

In the letter, legislators maintain that shifting NASA’s headquarters to the Houston area makes sense because “a seismic disconnect between NASA’s headquarters and its missions has opened the door to bureaucratic micromanagement and an erosion of [NASA] centers’ interdependence.”

Founded in 1961, the $1.5 billion, 1,620-acre Johnson Space Center hosts NASA’s mission control and astronaut training operations. More than 12,000 employees work at the 100-building complex.

According to the state comptroller, the center generates an annual economic impact of $4.7 billion for Texas, and directly and indirectly supports more than 52,000 public and private jobs.

In pitching the Johnson Space Center for NASA’s HQ, the letter points out that Texas is home to more than 2,000 aerospace, aviation, and defense-related companies. Among them are Elon Musk’s SpaceX, based in the newly established South Texas town of Starbase; Axiom Space and Intuitive Machines, both based in Houston; and Firefly Aerospace, based in the Austin suburb of Cedar Park.

The letter also notes the recent creation of the Texas Space Commission, which promotes innovation in the space and commercial aerospace sectors.

Furthermore, the letter cites Houston-area assets for NASA such as:

  • A strong business environment.
  • A low level of state government regulation.
  • A cost of living that’s half of what it is in the D.C. area.

“Moving the NASA headquarters to Texas will create more jobs, save taxpayer dollars, and reinvigorate America’s space agency,” the letter says.

Last November, NASA said it was hunting for about 375,000 to 525,000 square feet of office space in the D.C. area to house the agency’s headquarters workforce. About 2,500 people work at the agency’s main offices. NASA’s announcement set off a scramble among three states to lure the agency’s headquarters.

Aside from officials in Texas, politicians in Florida and Ohio are pressing NASA to move its headquarters to their states. Florida and Ohio both host major NASA facilities.

NASA might take a different approach, however. “NASA is weighing closing its headquarters and scattering responsibilities among the states, a move that has the potential to dilute its coordination and influence in Washington,” Politico reported in March.

Meanwhile, Congressional Delegate Eleanor Holmes Norton, a Democrat who represents D.C., introduced legislation in March that would prohibit relocating a federal agency’s headquarters (including NASA’s) away from the D.C. area without permission from Congress.

“Moving federal agencies is not about saving taxpayer money and will degrade the vital services provided to all Americans across the country,” Norton said in a news release. “In the 1990s, the Bureau of Land Management moved its wildfire staff out West, only to move them back when Congress demanded briefings on new wildfires.”

Houston research breakthrough could pave way for next-gen superconductors

Quantum Breakthrough

A study from researchers at Rice University, published in Nature Communications, could lead to future advances in superconductors with the potential to transform energy use.

The study revealed that electrons in strange metals, which exhibit unusual resistance to electricity and behave strangely at low temperatures, become more entangled at a specific tipping point, shedding new light on these materials.

A team led by Rice’s Qimiao Si, the Harry C. and Olga K. Wiess Professor of Physics and Astronomy, used quantum Fisher information (QFI), a concept from quantum metrology, to measure how electron interactions evolve under extreme conditions. The research team also included Rice’s Yuan Fang, Yiming Wang, Mounica Mahankali and Lei Chen along with Haoyu Hu of the Donostia International Physics Center and Silke Paschen of the Vienna University of Technology. Their work showed that the quantum phenomenon of electron entanglement peaks at a quantum critical point, which is the transition between two states of matter.

“Our findings reveal that strange metals exhibit a unique entanglement pattern, which offers a new lens to understand their exotic behavior,” Si said in a news release. “By leveraging quantum information theory, we are uncovering deep quantum correlations that were previously inaccessible.”

The researchers examined a theoretical framework known as the Kondo lattice, which explains how magnetic moments interact with surrounding electrons. At a critical transition point, these interactions intensify to the extent that the quasiparticles—key to understanding electrical behavior—disappear. Using QFI, the team traced this loss of quasiparticles to the growing entanglement of electron spins, which peaks precisely at the quantum critical point.

In terms of future use, the materials share a close connection with high-temperature superconductors, which have the potential to transmit electricity without energy loss, according to the researchers. By unblocking their properties, researchers believe this could revolutionize power grids and make energy transmission more efficient.

The team also found that quantum information tools can be applied to other “exotic materials” and quantum technologies.

“By integrating quantum information science with condensed matter physics, we are pivoting in a new direction in materials research,” Si said in the release.

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This article originally appeared on our sister site, EnergyCapitalHTX.com.

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