Exxon Mobil Oil Company: Innovation Analysis
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| Assignment Type | Essay |
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| Subject | Innovation |
| Academic Level | Undergraduate |
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| Length | 7 pages |
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Exxon Mobil Oil Company: Innovation Analysis
A Topical Overview
Pollard (2014) suggested that “Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable” (1). As a constantly evolving world, those organizations that are able to anticipate change and to innovate to flourish within those changing dimensions will succeed while those who do not will perish. Organizations, well cognizant of this phenomenon, are constantly searching for ways to innovate so they can create new opportunities, mitigate existing risks/pitfalls and problem solve. Being able to take an idea from its inception to its widespread application in practice can be a long arduous process. While ideas can often manifest from accidents, development and facilitation of concepts is a process that needs nurtured. New product development processes typically include: idea generation, product development, market analysis, commercialization or product launch (Course Notes 2014). For energy organization juggernaut, Exxon Mobil, new drilling opportunities, climate change, environmental standards, public demand and decreasing natural resources represent their current operational paradigm. In order to deal with these conditions, the organization is being forced to generate and develop ideas that can help them adapt rather than plummet into obscurity in the future.
This work will examine the innovation process of Exxon Mobil within the context of idea generation and product development. Being that Exxon Mobil is a large company with many facets, the way in which the organization is thinking about and dealing with fresh water conservation related issues will be the crux of the examination. By examining theoretical processes behind innovation and comparing them with Exxon’s innovation strategy, an analysis of the strengths and related weaknesses of Exxon’s current direction on water related resources will be established. Though by no means comprehensive, this work will provide a sufficiently robust examination of where Exxon stands practically and philosophically on innovation related to water conservation as they continue to develop international strategies.
Ideas Generation
Ideas generation can be considered the first portion of the new product development process. Though perhaps simplistic, it can be stated that no innovation is implemented and developed without first being an idea. While ideas are important, not all ideas are created equal. As a result, generating ideas and filtering ideas that should be pursued further is of the utmost importance for innovation related success within an organization. According to McAdam and McClelland (2002), the role of idea generation as part of the overall organizational creativity and team process is of immense consequence to all organizations. The current literature on the subject, however, is somewhat lacking (McAdam & Mclelland 2002). Idea generation can occur in many ways. It can be a spontaneous accident or it can be facilitated as a direct consequence of problem solving related to a given stimuli or a potential stimuli/situation that will likely occur in the future. For organizations, the business world is a rapidly changing environment. Based on demand, innovation, regulation and an infinite number of other variables, what made an organization successful in the past may not be the recipe for success in the future. Acona (2005), for example, has illustrated that the elements that were favored in 20th Century organizations are ill equipped for the environmental demands of 21st Century operation. If those elements favored in the 21st Century were applied to the 20th Century, however, they would have likely been unsuccessful.
While no one can predict the future, projections can be made based on business intelligence. Within this spectrum, many attempts at idea generation for innovation are directly attempted to be generated by organizations or by seeking outside ideas to remedy existing or upcoming issues. Newman (2008) has attributed the facilitation of idea generation among staff as one of the key variables of having a successful leadership model within an organization. Studies of where ideas come from have suggested that think tanks or other organized methods for generating ideas for innovation are not the typical environments in which the best ideas are usually generated (Tucker 2013). There are a number of radical innovation projects like IBM’s silicon-germanium device, GE’s digital X-Ray and DuPont’s biodegradable plastics (Tucker 2013). In nearly all of the cases, however, ideas behind critical projects were from happy accidents rather than some ongoing process to generate ideas (Tucker 2013). While on a cursory glance this would suggest that perhaps organizations should abandon organized efforts to generate ideas, there is more data that suggests otherwise. For example, key findings related to these idea generating mechanisms by Rensselaer researchers found “Almost without exception, these idea generation methods have been applied sporadicly, rather than systematically, continuously and strategically” (Tucker 2013: 1).
In many situations, the “happy accident” paradigm came from freelancing or people working under their own initiatives (Tucker 2013). There is, as a result, the potential for organizations to establish organized idea generation faculties within an organization to aid in future innovation. As stated previously, part of generating ideas and solutions comes from anticipating upcoming issues. For Exxon Mobil, the organization poignantly established water conservation as an important variable in the future of mankind as well as in the future of their organization’s sustainability. According to Exxon Mobil (2014), over 70% of the earth’s surface is covered by water, however, 97% of this water is salt and only 1 percent of fresh water is in liquid form. Though perhaps the oil and gas industry use less water than agriculture or power generation, they do utilize water thereby making water protection and minimum use an important element in the progress of the organization (Exxon 2014). According to Exxon Mobil (2014), “Energy is more than a commodity: it is an enabler of progress” as it raises living standards, creates jobs and contributes to social welfare globally (1). In order to do so, however, protection of human health/environment, consideration of local water needs, continuous improvement of capabilities and engagement of stakeholders in the development of sustainable water solutions is at the forefront of their operational focus at the present time (Exxon 2014).
In order to use less water or pollute less water, Exxon Mobil has to improve capabilities and performance as they have stated. Doing so requires innovation and constant improvement of current methodologies. The innovations will stem from current and future ideas. Presently, Exxon has demonstrated a commitment to facilitating ideas related to water issues and the gas and oil industry. One of the organized methods for generating ideas is through the engagement of stakeholders. This is essentially creating a think tank to develop solutions that can be organized, developed and implemented. In keeping with the established research, rather than simply waiting for a “happy accident” or for freelance efforts of staff/stakeholders to generate a solution, the company has taken a systematic approach to ideas generation for the water issue pertaining to the oil and gas industry. As reported by Tucker (2013), organizations that use systematic, strategic and continuos strategies for ideas generation will be more likely to innovate in an efficacious manner. It can be stated that on the level of idea generation in the innovation process, Exxon Mobil is embracing a balance between theoretical research and practical application. If they are successful, benefits to humanity will results on the level of water conservation.
Product Development
Exxon Mobil uses applied science based approaches to performance improvement and this method was touched upon in the idea generation phase of the discourse. In reality, however, the science behind Exxon Mobil’s techniques are essentially taking the good ideas that have been generated and then conducting academic research on the parameters of those ideas to push the process of innovation along. Once an idea or ideas have been deemed sufficient enough for pursuit, the company then has to make the idea a reality through strategic use of resources. According to the company, the organization has invested 8 billion dollars in the past 10 years and nearly 2 billion on technologies related to safety and the environment (Exxon Performance 2014). While this includes many facets, in regards to water, the following has been established: lifecycle assessments and alternative comparisons, collaborative research and Imperial Oil (Exxon Performance 2014). In regards to alternative energy, Exxon Mobil has been working with universities to examine topics like algae biofuel technology and shale gas production as well as their impacts on water (Exxon Performance 2014).
Underwater sounds and arctic spill prevention and response have also been subjects in which ideas have been researched and developed by the organization (Exxon Performance 2014). In addition, they have teamed up with other major oil companies to develop and share technologies that improve environmental performance in the Canadian oil sands sector (Exxon Performance 2014). Specifically, the future of energy on the planet has a number of known factors in which Exxon is being forced to respond and develop ideas. First, oil is finite resource and the reserve supply will dry up eventually. As global warming persists, however, the melting of the polar icecaps will present new opportunities for drilling North of Canada and finding new reserves (The Guardian 2014). In addition, other forms of energy, particularly renewable energy may be the future for mankind and for Exxon and this is why they are exploring ideas related to algae biofuel and other elements.
While a number of ideas pertaining to water safety are being developed by the organization, at this point in time, there is not a singular innovation within this spectrum that is ready for marketing or full product implementation. While it is likely innovations will rise from these processes, they are still in the developmental phase. In the 1970’s, however, research related to fresh water conservation generated a product/practice where the reuse of produced water to generate steam in Cold Lake operations (Exxon Performance 2014). In addition alternative saline groundwater sources were found and this enabled the organization to use less fresh water in their operations. Overall, what began as an idea turned into a water conservation related innovation that has resulted in a reduction of fresh water use per unit of product by 90% since 1985 (Exxon Performance 2014). This science based approach to improvement is the same way in which the organization will take ideas and develop them for future potential use or expansion.
Overall Conclusions: Exxon Mobil Innovation
It can be stated that Exxon has acknowledged the importance of systematic, continuous and strategic idea generation methods as outlined by Tucker (2013). Rather than relying on happy accidents, the organization has demonstrated a commitment to actively facilitating ideas. While this is true across many facets of the organization, it is particularly true and demonstrated within their scope of water related issues for sustainability. The most current example of an idea that was taken into practice related to water was Cold lake reuse of steam water and the employment of natural saline water to replace fresh water use. The results of this process have been astounding. Presently, however, there are new issues pertaining to water conservation that necessitate consideration within the spectrum of melting polar ice caps, Canadian drilling and fresh water supplies around the world in developing nations. Exxon has reached out to other oil companies as well as local stakeholders to facilitate ideas and related interventions. This is both facilitated by forced international laws and protocols as well as a new focus on what can be considered the triple bottom line. Exxon, like many 21st Century organizations is now focused on profit, environmental sustainability and social welfare (Savitz & Weber 2006). Savitz and Weber (2006) have established this practice as being consistent with today’s best run companies.
Traditional business models typically put full focus on profit thereby necessitating regulations and other 3rd party interventions into business practices. How many of the ideas that are being developed and researched will make it into practice are unknown at the present time. Exxon Mobil, however, has successful taken water conservation related ideas into practice in the past and there is little reason to suggest that their strategy for product development processes will continue to serve them well while attempting to respond to future market/environmental changes. Exxon Mobil, as well as other major oil and gas manufacturers, have all experienced highly publicized environmental disasters. This has put an increased focus on environmental responsibility for the industry and in related industries in general. While the exact portion to which this has influenced Exxon’s policy on environmental related innovations is unknown, it is certainly one of the existing changes that pushed the organization more rapidly into a comprehensive idea development practice in regards to sustainability.
References
A Topical Overview
Pollard (2014) suggested that “Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable” (1). As a constantly evolving world, those organizations that are able to anticipate change and to innovate to flourish within those changing dimensions will succeed while those who do not will perish. Organizations, well cognizant of this phenomenon, are constantly searching for ways to innovate so they can create new opportunities, mitigate existing risks/pitfalls and problem solve. Being able to take an idea from its inception to its widespread application in practice can be a long arduous process. While ideas can often manifest from accidents, development and facilitation of concepts is a process that needs nurtured. New product development processes typically include: idea generation, product development, market analysis, commercialization or product launch (Course Notes 2014). For energy organization juggernaut, Exxon Mobil, new drilling opportunities, climate change, environmental standards, public demand and decreasing natural resources represent their current operational paradigm. In order to deal with these conditions, the organization is being forced to generate and develop ideas that can help them adapt rather than plummet into obscurity in the future.
This work will examine the innovation process of Exxon Mobil within the context of idea generation and product development. Being that Exxon Mobil is a large company with many facets, the way in which the organization is thinking about and dealing with fresh water conservation related issues will be the crux of the examination. By examining theoretical processes behind innovation and comparing them with Exxon’s innovation strategy, an analysis of the strengths and related weaknesses of Exxon’s current direction on water related resources will be established. Though by no means comprehensive, this work will provide a sufficiently robust examination of where Exxon stands practically and philosophically on innovation related to water conservation as they continue to develop international strategies.
Ideas Generation
Ideas generation can be considered the first portion of the new product development process. Though perhaps simplistic, it can be stated that no innovation is implemented and developed without first being an idea. While ideas are important, not all ideas are created equal. As a result, generating ideas and filtering ideas that should be pursued further is of the utmost importance for innovation related success within an organization. According to McAdam and McClelland (2002), the role of idea generation as part of the overall organizational creativity and team process is of immense consequence to all organizations. The current literature on the subject, however, is somewhat lacking (McAdam & Mclelland 2002). Idea generation can occur in many ways. It can be a spontaneous accident or it can be facilitated as a direct consequence of problem solving related to a given stimuli or a potential stimuli/situation that will likely occur in the future. For organizations, the business world is a rapidly changing environment. Based on demand, innovation, regulation and an infinite number of other variables, what made an organization successful in the past may not be the recipe for success in the future. Acona (2005), for example, has illustrated that the elements that were favored in 20th Century organizations are ill equipped for the environmental demands of 21st Century operation. If those elements favored in the 21st Century were applied to the 20th Century, however, they would have likely been unsuccessful.
While no one can predict the future, projections can be made based on business intelligence. Within this spectrum, many attempts at idea generation for innovation are directly attempted to be generated by organizations or by seeking outside ideas to remedy existing or upcoming issues. Newman (2008) has attributed the facilitation of idea generation among staff as one of the key variables of having a successful leadership model within an organization. Studies of where ideas come from have suggested that think tanks or other organized methods for generating ideas for innovation are not the typical environments in which the best ideas are usually generated (Tucker 2013). There are a number of radical innovation projects like IBM’s silicon-germanium device, GE’s digital X-Ray and DuPont’s biodegradable plastics (Tucker 2013). In nearly all of the cases, however, ideas behind critical projects were from happy accidents rather than some ongoing process to generate ideas (Tucker 2013). While on a cursory glance this would suggest that perhaps organizations should abandon organized efforts to generate ideas, there is more data that suggests otherwise. For example, key findings related to these idea generating mechanisms by Rensselaer researchers found “Almost without exception, these idea generation methods have been applied sporadicly, rather than systematically, continuously and strategically” (Tucker 2013: 1).
In many situations, the “happy accident” paradigm came from freelancing or people working under their own initiatives (Tucker 2013). There is, as a result, the potential for organizations to establish organized idea generation faculties within an organization to aid in future innovation. As stated previously, part of generating ideas and solutions comes from anticipating upcoming issues. For Exxon Mobil, the organization poignantly established water conservation as an important variable in the future of mankind as well as in the future of their organization’s sustainability. According to Exxon Mobil (2014), over 70% of the earth’s surface is covered by water, however, 97% of this water is salt and only 1 percent of fresh water is in liquid form. Though perhaps the oil and gas industry use less water than agriculture or power generation, they do utilize water thereby making water protection and minimum use an important element in the progress of the organization (Exxon 2014). According to Exxon Mobil (2014), “Energy is more than a commodity: it is an enabler of progress” as it raises living standards, creates jobs and contributes to social welfare globally (1). In order to do so, however, protection of human health/environment, consideration of local water needs, continuous improvement of capabilities and engagement of stakeholders in the development of sustainable water solutions is at the forefront of their operational focus at the present time (Exxon 2014).
In order to use less water or pollute less water, Exxon Mobil has to improve capabilities and performance as they have stated. Doing so requires innovation and constant improvement of current methodologies. The innovations will stem from current and future ideas. Presently, Exxon has demonstrated a commitment to facilitating ideas related to water issues and the gas and oil industry. One of the organized methods for generating ideas is through the engagement of stakeholders. This is essentially creating a think tank to develop solutions that can be organized, developed and implemented. In keeping with the established research, rather than simply waiting for a “happy accident” or for freelance efforts of staff/stakeholders to generate a solution, the company has taken a systematic approach to ideas generation for the water issue pertaining to the oil and gas industry. As reported by Tucker (2013), organizations that use systematic, strategic and continuos strategies for ideas generation will be more likely to innovate in an efficacious manner. It can be stated that on the level of idea generation in the innovation process, Exxon Mobil is embracing a balance between theoretical research and practical application. If they are successful, benefits to humanity will results on the level of water conservation.
Product Development
Exxon Mobil uses applied science based approaches to performance improvement and this method was touched upon in the idea generation phase of the discourse. In reality, however, the science behind Exxon Mobil’s techniques are essentially taking the good ideas that have been generated and then conducting academic research on the parameters of those ideas to push the process of innovation along. Once an idea or ideas have been deemed sufficient enough for pursuit, the company then has to make the idea a reality through strategic use of resources. According to the company, the organization has invested 8 billion dollars in the past 10 years and nearly 2 billion on technologies related to safety and the environment (Exxon Performance 2014). While this includes many facets, in regards to water, the following has been established: lifecycle assessments and alternative comparisons, collaborative research and Imperial Oil (Exxon Performance 2014). In regards to alternative energy, Exxon Mobil has been working with universities to examine topics like algae biofuel technology and shale gas production as well as their impacts on water (Exxon Performance 2014).
Underwater sounds and arctic spill prevention and response have also been subjects in which ideas have been researched and developed by the organization (Exxon Performance 2014). In addition, they have teamed up with other major oil companies to develop and share technologies that improve environmental performance in the Canadian oil sands sector (Exxon Performance 2014). Specifically, the future of energy on the planet has a number of known factors in which Exxon is being forced to respond and develop ideas. First, oil is finite resource and the reserve supply will dry up eventually. As global warming persists, however, the melting of the polar icecaps will present new opportunities for drilling North of Canada and finding new reserves (The Guardian 2014). In addition, other forms of energy, particularly renewable energy may be the future for mankind and for Exxon and this is why they are exploring ideas related to algae biofuel and other elements.
While a number of ideas pertaining to water safety are being developed by the organization, at this point in time, there is not a singular innovation within this spectrum that is ready for marketing or full product implementation. While it is likely innovations will rise from these processes, they are still in the developmental phase. In the 1970’s, however, research related to fresh water conservation generated a product/practice where the reuse of produced water to generate steam in Cold Lake operations (Exxon Performance 2014). In addition alternative saline groundwater sources were found and this enabled the organization to use less fresh water in their operations. Overall, what began as an idea turned into a water conservation related innovation that has resulted in a reduction of fresh water use per unit of product by 90% since 1985 (Exxon Performance 2014). This science based approach to improvement is the same way in which the organization will take ideas and develop them for future potential use or expansion.
Overall Conclusions: Exxon Mobil Innovation
It can be stated that Exxon has acknowledged the importance of systematic, continuous and strategic idea generation methods as outlined by Tucker (2013). Rather than relying on happy accidents, the organization has demonstrated a commitment to actively facilitating ideas. While this is true across many facets of the organization, it is particularly true and demonstrated within their scope of water related issues for sustainability. The most current example of an idea that was taken into practice related to water was Cold lake reuse of steam water and the employment of natural saline water to replace fresh water use. The results of this process have been astounding. Presently, however, there are new issues pertaining to water conservation that necessitate consideration within the spectrum of melting polar ice caps, Canadian drilling and fresh water supplies around the world in developing nations. Exxon has reached out to other oil companies as well as local stakeholders to facilitate ideas and related interventions. This is both facilitated by forced international laws and protocols as well as a new focus on what can be considered the triple bottom line. Exxon, like many 21st Century organizations is now focused on profit, environmental sustainability and social welfare (Savitz & Weber 2006). Savitz and Weber (2006) have established this practice as being consistent with today’s best run companies.
Traditional business models typically put full focus on profit thereby necessitating regulations and other 3rd party interventions into business practices. How many of the ideas that are being developed and researched will make it into practice are unknown at the present time. Exxon Mobil, however, has successful taken water conservation related ideas into practice in the past and there is little reason to suggest that their strategy for product development processes will continue to serve them well while attempting to respond to future market/environmental changes. Exxon Mobil, as well as other major oil and gas manufacturers, have all experienced highly publicized environmental disasters. This has put an increased focus on environmental responsibility for the industry and in related industries in general. While the exact portion to which this has influenced Exxon’s policy on environmental related innovations is unknown, it is certainly one of the existing changes that pushed the organization more rapidly into a comprehensive idea development practice in regards to sustainability.
References