Shell is Open for Innovation

The stereotype image of a large company is one of distance, secrecy and lack of speed.  Yet Shell is actively trying to change this view.  This mega company with a turnover of $451bn recently invited a small group of bloggers to visit Shell Technology Centre Amsterdam (STCA) to tell them about their innovation plans.  My invitation arrived out of the blue so, not being sure what I’d done to deserve it, I accepted with a growing sense of curiosity.

Why does a company employing 92,000 people and spending $1.3bn on R&D need to go outside for more innovation?  The reason is one of the classic foundations of Open Innovation.  Shell realises that, despite the presence of internal excellence, there are more smart people and technologies in the external world that can add value to their innovation portfolio.  This year also coincides with the 100^th anniversary of their first laboratory in Amsterdam – in the office kitchen! – providing an extra platform for publicity.

Shell have a much longer-term view than many other industry sectors, given the nature of the challenges the world faces with issues such as energy, food and water; and the investment profile of the solutions that need to be implemented.  One example is the development of the world’s largest gas-to-liquids plant, from small scale at STCA via pilot plant to full build.  This really brings home the sheer scale of the business, highlighting the need for long-term external collaboration.  Even work of this scale starts small, and needs external partnerships.

According to Sergio Kapusta, one of the company’s Chief Scientists, Shell wants to be “The most competitive and innovative energy company”.  In order to achieve this, Sergio stated that they are willing to work with anyone. Jaco Fok, GM of Open Innovation, described the well-structured and coherent programme for working with external partners.  It consists of:

• Gamechanger, seeking proposals for radical innovation;
• External Technology Collaboration, primarily with suppliers;
• Shell Technology Ventures, an investment fund for early stage companies;
• Shell Techworks, looking to rapidly prototype technologies already proven  elsewhere;
• Shell Ideas 360, a global idea competition for students.

I’ve been involved with several innovation portal projects, and I’m a fan of the Gamechanger programme.  In 17 years of operation, it’s evaluated 1500 proposals and implemented 100.  One of them is a massive project to develop a Floating Liquefied Natural Gas (FLNG) plant, a truly radical innovation; I’ll write more about Gamechanger in another blog.

Shell is also engaged in joint ventures to explore new technologies and business.  One example we saw was Paqell, a JV with Paques, to use sulfur-extracting bacteria to remove dangerous hydrogen sulphide from natural gas.  This has many advantages over current methods, not least from a sustainability perspective.

Our tour of STCA also showcased many aspect of supportive technology, from leading edge techniques such as 3D metal printing to more traditional work such as glassblowing.  STCA also enables new technologies to go from bench to pilot plant on the same site, albeit a large one!

There was a thought at the back of my mind, perhaps the skeptical scientist in me, that wondered about the depth of the openness. It’s entirely reasonable not to be told certain information, such as the details of the un-patented work going on in the catalyst lab.  The answer came for me when I asked our guide how much of what we’d seen, except for the tiny number of specified items, could be published or discussed outside of Shell.  The response – everything.

In my view, Shell has it right in its approach to Open Innovation.  They recognise the strategic need; they have structures and initiatives in place; and they are now strengthening the message to attract more partners for Open Innovation.  On the evidence of the blogger visit, the openness and long-term commitment are not only real, but also very exciting.

image credit: fokkema-partners.nl

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  Kevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of their innovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions, and also has experience in life sciences.