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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Overheard: Master P shares his entrepreneurial advice at Houston Tech Rodeo kickoff

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Percy Miller developed his music career as Master P, but it's far from his only entrepreneurial endeavor. At Houston Exponential's kick-off event for the 2021 Houston Tech Rodeo, Miller took the virtual stage with Zack O'Malley Greenburg, a journalist and author.

In the discussion, Miller shared his experience in his many fields of entrepreneurship, including music, fashion, consumer packaged goods, and more. He focused on trusting your own hard work, surrounding yourself with a good support system, and embracing failure — something he's done throughout his career.

"I don't look at it as a loss. I look at it as a lesson. Every 'L' is a lesson," he says. "Every time I had a business fail, I learned something from it and it opened up a door into a future."

To hit the highlights from the fireside chat with Master P, check out some overheard moments below. To stream the full broadcast, click here.

“A music career only lasts 3 to 5 years at the most. … I started diversifying my portfolio and I looked at the tech side and said, ’This is where you got to be at.’”

Miller says he was out in the Bay Area in the '90s and early '00s, and he saw first hand the tech scene developing in Silicon Valley. He even released an album in 2005 called Ghetto Bill, a reference to Bill Gates.

“I have failed a lot — don’t be afraid to fail. Get out and take that chance on yourself.”

Miller's music career mirrors, in some ways, the dynamic path of a startup. He received a $10,000 investment from his grandparents and used it to launch his career.

"I created an empire with $10,000," he says.

But It wasn't always easy, and Miller remembers the hustle, selling his music from the trunk of his car, and his many failures.

“You have to be committed to what you do — and you have to love it. It never was about money. When you’re passionate about something, you have a purpose. You’ll get there. If you do it for money, you’ll probably never be successful.”

Passion is a key ingredient in the recipe for success, Miller explains. It drives accomplishment and, "if you get it that easy, you'll probably lose it even quicker," he continues.

“I have an entrepreneurial spirit — I have to learn everything about what I’m doing.”

When it came to developing his music career, Miller says he wore every different hat in the process because he knew he would work the hardest.

"For me, if I can be the talent and the person who runs the company, I feel like there's no limit," Miller says. "I knew I could depend on myself."

“Show me your friends, and I can show you your future.”

Miller started his own record label, No Limit Records, and it was here he cultivated an environment of artists who didn't just want to perform, get pampered, and hang out at the club.

"People at No Limit — it was like a university," he says. "Everybody was coming to study to not only learn how to be an artist but also learn entrepreneurship and financial literacy."

“Most people wanted that advanced check, that money upfront. But my thing was I wanted the control in the end. When you come from a poor culture, you look at things differently. At least I did.”

Miller says he learned this at a young age, that if you hold the power, you make the decisions. "I want better for my kids and the only way I am going to do that is by creating longevity where I own the largest percent of the company," he says.

“It’s all about economic empowerment — we’re stronger together.”

Miller says he's focused on product and taking over the grocery stores, as well as driving economic empowerment for other BIPOC-founded companies and putting money back into the community.

"I want to focus on other minority-owned companies and brands get their products on the shelves,' he says.

Experts: Houston can win in the energy transition — here's how

Guest column

President Joe Biden recently announced his 2030 goal for the United States to achieve a 50 percent reduction in greenhouse gas emissions from its 2005 levels. This announcement comes on the heels of the American Jobs Plan, a $2 trillion infrastructure and climate-response program which offers a host of energy- and climate change-related initiatives, including a plan to speed up the conversion of the country to carbon-free electricity generation by 2035.

To reach these goals, companies of all industries are looking to implement clean energy investments and practices and do so quickly. Perhaps more than any major city in America, Houston faces fundamental questions about its economy and its future in the global Energy Transition. Some 4,600 energy companies, including more than a dozen Fortune 500 companies, serve as the foundation of the city's economy.

While many of these are working in the renewables space, the vast majority are rooted in fossil fuels. Many in Houston have long been anticipating this move towards renewables, but the new executive position on emissions has brought renewed pressure on Houston to take action and put investments behind securing its position as the Energy Capital of the World.

Houston's energy transition status

There has been an uptick in Energy Transition activity in Houston over the past several years. Currently, Houston boasts at least 100 solar energy-related companies and 30 wind energy-related companies. Environmental Entrepreneurs ranked Houston seventh among the top 50 U.S. metro areas for clean energy employment in the fourth quarter of 2019, with 1.9 percent of all clean energy jobs in the U.S. In 2019, Houston had 56,155 clean energy jobs, up nearly 4 percent from 2018, according to E2. However, by comparison, there are roughly 250,000 fossil fuel jobs in the area. (S&P Global)


Many traditional oil and gas companies have embraced this change, pivoting to more sustainable and resilient energy solutions. Companies working in tangentially related industries, like finance, infrastructure and services, are beginning to understand their role in the Energy Transition as well.

The challenge

While the Bayou City's proximity to the bay and natural oil supply may have set the scene for Houston's Energy Capital Status, the same geographic advantages do not exist in this new renewable space. As many have already begun to realize – Houston companies must make a concerted and timely effort to expend their focus to include renewables.

Greater Houston Partnership recently launched a new initiative aimed at accelerating Houston's activity around energy transition, while existing committees will continue efforts to bring energy tech and renewable energy companies to Houston. This initiative will bolster Houston's smart city efforts, explore the policy dimensions of carbon capture, use, and storage, and advocate for legislation that helps ensure the Texas Gulf Coast is positioned as a leader in that technology.

The Partnership estimates the city has seen $3.7 billion dollars of cleantech venture funding in recent years. Still, the infrastructure and services sector of the Energy Transition is vastly underinvested in, especially when compared to the tens of billions in the more traditional sector.

The opportunity

Houston, and the energy markets specifically, have always been great at raising capital and deploying it. The energy companies and capital needed to support them will continue to be in Houston as the energy markets transition to renewable sources in addition to fossil fuels.

The job opportunities in Houston and new energy are going to be significant. Texas is well suited to fit these needs as the technical skillset from fossil fuels to renewables is highly transferable. Given the technical expertise needed to manage energy—whether it's oil, gas or renewables—Houston and Texas will always have the universities here that feed the technical skills needed in energy.

Houston has always done a great job at attracting energy companies and related businesses to move their headquarters here or open and office in the area. Additionally, offering proper training opportunities for both oil and gas and renewable energy jobs has a proven track record of spurring growth and attracting talent to our area.

All of this, combined with a concerted effort from investors willing to double down on the sectors of solar, storage, electric vehicles and energy management sectors are critical. With swifter growth for jobs in the renewable space and incentivization of the next generation of energy companies, Houston can forge a clear path towards the "New Energy Capital of the World."

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Eric Danziger and Jordan Frugé are managing directors at Houston-based Riverbend Energy Group.

3 Houston innovators to know this week

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Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — sports tech, energy, and more — recently making headlines in Houston innovation.

Lawson Gow, founder of The Cannon

Lawson Gow is bullish on Houston becoming a sports tech hub. Photo courtesy of The Cannon

Is Houston the next hub for sports tech innovation? Lawson Gow thinks so.

"Sports tech is a thing we can win at. There's no global hub for sports tech — so Houston can do that," Gow says. "We've always had that in our heads as a direction we want the city to head down, so it just makes it so opportunistic to create a space for that kind of innovation at work for the city."

The founder of Houston coworking company, The Cannon, announced last week plans for a sports tech hub in partnership with Braun Enterprises and Gow Media (InnovationMap's parent company). Click here to read more.

Kate Evinger, director of gBETA Houston

Kate Evinger joins the Houston Innovators Podcast to discuss the latest from gBETA Houston. Photo courtesy of gBETA

Most accelerators are focused on growing startups in a specific way toward a specific goal. For gBETA Houston, that goal is toward a new round of funding or another accelerator, says Kate Evinger, director of gBETA Houston on last week's episode of the Houston Innovators Podcast.

"We look at early-stage companies, so those that are pre-seed or seed-stage that are looking for mentorship or support," Evinger says on this week's episode of the Houston Innovators Podcast, "and we help get to that next step whether that's to raise an upcoming round or if they are looking to get into an equity-based accelerator program."

Evinger shares more details on the ongoing cohort on the episode. Click here to read more and stream the show.

Michael Lee, CEO of Octopus Energy US

A $2.23 million deal means a growing presence Texas for Octopus Energy. Photo via LinkedIn

A United Kingdom-founded energy company has expanded yet again in the Texas market. Octopus Energy announced the acquisition of Houston-based Brilliant Energy last week, and it's a huge opportunity for the company says Octopus Energy's United States CEO Michael Lee.

"This is a major moment for us, as we work to bring our 100% renewable energy supply and outstanding technology to more Texans and their homes," he says. Click here to read more.

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