Shell and Thales Execs on Innovation Outposts

By Scott Kirsner |  July 27, 2016

Some highlights from the session:

  • David Kordonowy of Shell: “Shell TechWorks was set up to solve some of Shell’s and [the] oil and gas [industry’s] biggest problems. It’s a very insular industry. The premise behind Shell TechWorks is that no one that works there is from the oil and gas industry. We take people outside the industry, that have an entrepreneurial spirit, and we put them into this group, take tough challenges from within the oil and gas industry, and find different ways to solve them.” About 70 people work at TechWorks, over half of them engineers.
  • Pete Roney of Thales Group says the French defense and aerospace company has about five full-timers in the Cambridge office, but hosts “xPlorers-in-residence” from other Thales business units, on a three-year contract.
  • On metrics, Kordonowy says that given the decline in oil prices, in 2016 Shell “is really concerned with cost-cutting. One aspect on which we are measured is our ability to deploy products that reduce the cost of operation.” But another aspect the group is measured on is “transitioning Shell from an oil and gas company to an energy company,” including renewables. Roney says at Thales, the key metric “is growth. Our global leadership expects to see measurable growth at the top line of Thales within three to five years.” That can be growth from internally-created businesses, growth through acquisition, or growth through investments in startups.
  • Innovation labs can “die a cultural death,” Kordonowy says, noting that he has worked in R&D and innovation groups in several companies prior to Shell. “Companies that want an innovation lab tend to set them up as different than their normal way of doing business.” But when they see success, they want to try to replicate it in other parts of the business, and apply too much process. “Both of those things are like poison. You need to be separate. The longer you interact with the big entity, the more opportunity you have to erode your own culture, and simply become another piece of the part that doesn’t work. You need a champion at the highest level, and that champion needs to be a disruptor.”
  • But both Kordonowy and Roney noted that you can’t count on your initial champion being around forever — so establishing numerous relationships throughout the organization is crucial. Says Roney, “One thing we’ve focused on is not only finding great functional people, but people who are really good at reaching into Thales, and making themselves known, and creating relationships throughout Thales…as well as doing that externally. That’s a really tough skill set to find.” After going through a change in leadership at the parent company, Roney says, “Our best defense has been our ability to sell. …Our team, while they have to be great designers and engineers, they have to be able to sell the hell out of whatever it is we’re building, and the organization we’re creating.”