By: Karen Boman
A Silicon Valley veteran offered lessons from the technology sector on how oil and gas companies can further implement digital oilfield technology and “cross the chasm” of moving technology from ideas to mainstream use.
Author, speaker and advisor Geoffrey Moore discussed with attendees at the recent Society of Petroleum Engineers Digital Energy Conference near Houston earlier this month the frameworks of measuring the adoption of technology, such as how change diffuses through a population, how technology moves from early adopters to the rest of a population, and how to cross the chasm in technology innovation inside large companies, which have a lot of inertial momentum around legacy.
“The latter also is known as crossing the chasm inside the belly of the whale.”
It’s not a matter of if, but when digitization will transform the oil and gas industry, just as it has transformed education, transportation and healthcare, Moore said. Moore shared this thumbnail view of frameworks used in the technology sector, and how oil and gas companies can use these frameworks to determine when to move forward with a disruptive technology. It also can help oil and gas technology vendors identify and better understand what strategies to use with partner companies in the oil and gas industry.
“When you’re in the middle of a disruption or expecting a disruption, you need frameworks to help you anticipate what will happen,” said Moore. “Frameworks don’t predict what will happen, but lets you quickly recognize things very quickly when they happen,” said Moore.
Frameworks are needed by industries such as oil and gas in good times, bad times, and in-between times such as now.
During his talk, Moore outlined one type of framework, the diffusion of innovations. This model was developed in the mid-twentieth century by professor and sociologist Everett Rogers, said Moore. The idea that a community such as the oil and gas industry will self-segregate into five different responses – roughly proportional to the one sigma, two sigma, three sigma model – still holds true today.
These five groups include:
- Technology enthusiasts – This group includes technology visionaries who want to learn about disruptive technology and like to be experts about new technology, even in their free time. (Think somebody like Dr. Sheldon Cooper from the TV show The Big Bang Theory) They also tend to want unrestricted access to top technology folks and have no money. They present challenges as customers, but they can serve as the “canary in the coal mine” in identifying the next big thing in technology.
“Without these folks, the rest of us wouldn’t never really understand what the technology is about,” said Moore.
- Early adopters or technology visionaries – This group of people likes disruption in technology in terms of the leverage it can give them. Examples include Apple, Amazon and Uber, which have leveraged technology to change the rules of the game. These folks are great imaginations, are charismatic, and good at talking people out of money.
“If you’re selling technology to a visionary, they’re there for you early on, but they want it now, they want it customized to their needs and they want exclusive rights to it.”
- The early majority, or pragmatists – These people want to be with the herd in terms of using technology, not ahead or behind, preferring proven applications and market leaders for technology. These people are usually responsible for spending at a company and don’t want to make mistakes. They tend to poll their peers at industry conference to determine whether to move forward with a technology.
“They want evolution, not revolution.”
- The late majority, or conservatives — This group doesn’t get along with new technology, preferring to stick with their existing systems for as long as possible. This strategy works but is in resistance to next wave. When that wave comes, they need it prepackaged, debugged and ready to go, and don’t want to hear that it only works 95 percent of the time.
- The laggards – This group is against new technology, and think technology vendors “don’t know when they’re lying.”
Companies typically pursue disruptive technology for three reasons – one to create the early market, the second to solve a problem that conventional solutions can’t address, and the third to catch up with trends. In the end, there’s no right answer to when a company should adopt a technology, but it’s important to understand the value propositions and the reason why a company is making the move, said Moore. The strategies of all five groups in the model are valid, and should be honored, Moore noted.