Point: Create an internal venture fund to incubate revolutionary ideas.

Story: This week’s Innovation Summit at the Shell Technology Center Houston (STCH) highlighted the need for innovation and collaboration to solve society’s most pressing challenges. As the world’s problems become more complex, the best way to tackle them is with a cross-disciplinary approach.

What are some ways that companies can foster this multidisciplinary collaboration to achieve breakthrough innovation? One way is to create an open mechanism inside the company that solicits promising ideas regardless of where they come from — including outside the company — and offering seed funding that’s outside of the company’s traditional R&D programs to give them time to develop.

GameChanger

Shell is doing this with its GameChanger program, headed by Russ Conser.  GameChanger seeks out and invests in early-stage ideas that could potentially revolutionize the energy industry. GameChanger plays the role of an angel investor; a panel screens ideas and selects ones to fund. Idea submissions can come from any Shell employee as well as from outside the company.

Shell actively solicits ideas from academics and entrepreneurs alike through its web site www.shell.com/GameChanger.  Ideas that pass the initial screen receive seed money — $25,000 to develop a robust proposal and on up to $500,000- $1 million a year to actually test and develop ideas that graduate into projects.

Example

For example, Erik Cornelissen, a research scientist, was in a toy store looking for a gift for his nephews when he saw a science toy that many of us have seen before: a dinosaur that grows in size when placed in water. A nifty, fun gift. But Erik made a connection back to a perplexing problem that had plagued Shell and other oil companies for a long time. Specifically, oil wells contain water, not just oil. Over time, more and more water gets pumped up relative to oil.  Not only does that make the well less productive, but it pumps water that increasingly is becoming a scarce resource itself. The question is, how to detect that water and prevent it from mixing with the oil?

Erik realized that the same principle behind the dinosaur toy — a material that expands upon contact with water — could be applied at the oil well. Erik needed to identify a “swellable elastomer” that would seal off the pipe when water started to mix with the oil flowing through it. The idea was not difficult to articulate or explain, but finding this kind of material proved long and difficult. GameChanger provided Erik with the time and funding he needed to go through hundreds of experiments to find the elastomer that fit the demanding conditions at the oil well site.

Results

About 40% of Shell’s core Exploration & Development R&D portfolio has evolved from ideas submitted to GameChanger, and 70% of the GameChanger portfolio includes collaboration with people outside of Shell.

Since its inception in 1996, GameChanger has funded 3000 ideas, investing $350 million and resulting in 250 commercial projects, said Gerald Schotman, EVP, Innovation, R&D and Chief Technology Officer at Shell.

Action

• Publicize clear and explicit selection criteria, so external submitters know what you want and will fund.  For example, GameChanger uses 3 primary criteria:

1. Novelty: is the idea truly and fundamentally new and different? (There’s no point in funding ideas that would qualify as traditional R&D projects.)
2. Value: Could the idea create substantial new value if it works? (Wild ideas are welcome, but ultimately they need to deliver value if they come to fruition.)
3. Credible Plan: is there a plan to manage risks prudently? (New ideas are risky, but many risks can be identified up front and plans can be put in place to stay ahead of them.)

• Have an end game for how you’ll commercialize an idea that demonstrates feasibility. For example, GameChanger uses 3 commercialization strategies:

1. Move the idea into the company’s internal R&D portfolio.
2. License the idea externally.
3. Spin off a new company to bring the idea to market.

Point: Test large-scale innovations for 1/20th the cost by using 3D simulations to prove viability and performance.

Story: Forty years ago, Georges Mougin got an idea: solve water shortages in drought-ridden countries by towing an iceberg over the sea to them. Floating icebergs are pure drinking water, but they slowly melt into seawater.  Why not harvest them before all that drinking water is lost?

The idea of towing an iceberg, however, seemed crazy.  When Mougin talked with scientists about the idea, objections abounded.  “Once you get north of the equator, you’ll have nothing but a rope at the end of your tow,” said Wilford Weeks of the U.S. Army Cold Regions Research and Engineering Laboratory at a conference in 1977 when hearing of the idea.  Other questions were: how much power would it take to tow 100-million ton iceberg? What would be the environmental impact of it melting in equatorial waters once it was anchored at a coastal city?

Although Mougin was confident of the idea’s viability, he had no way to prove it. Despite securing the backing of a Saudi prince, Prince Mohammed al Faisal, the projected costs and unanswered questions proved insurmountable.  But Mougin continued working on the idea, doggedly amassing data on issues like ocean currents and learning how technologies from other industries, like those developed for off-shore oil drilling, could be tapped.

Mougin’s lucky break came in 2009, when he heard of Dassault Systemes‘ “Passion for Innovation” program.  Dassault Systemes sponsors the Passion for Innovation program as a philanthropic venture to give individuals or nonprofits free access to Dassault Systemes’ suite of products (CATIA, DELMIA, SIMULIA, ENOVIA, 3DVIA. SoildWorks, Exalead) as well as a team of Dassault Systemes engineers.

“We’ll help you and provide you with the modeling and simulation technologies that should demonstrate that your project is feasible,” said Cedric Simard, IceDream Project Director, Dassault Systemes.

Dassault Systemes worked with Mougin: “We used virtual and digital simulation technology to recreate a virtual world around the iceberg, taking into account real oceanographic and weather data to simulate the sea currents at several depth levels, as well as the wind, waves, and even the impact of the sun’s rays,” Simard said.

After using CATIA software to create an exact model of the iceberg, the team used Dymola for the complex simulation, factoring in issues like ocean temperatures that would affect melting en route as well as meteorological phenomena like wind. The team also used SIMULIA software to consider risks such as fracturing of the iceberg. Running these simulations enabled the team to test the concept for a fraction of the cost of building a prototype: $500,000 instead of $10 million.

The simulations proved that it’d be possible to tow a 7-million-ton berg with one tugboat, primarily relying on ocean currents and consuming only 4000 tons of fuel over the 140-day journey, Simard said. The berg would experience some melting (38%) but still provide enough drinking water for 20,000 people for one year.

“Mougin is a very passionate guy,” Simard said. “He’s 87 years old, and he’s been working on his project for forty years. Now thanks to the power of simulation and the digital world, he can see how his idea would work in reality.”

Action:

• Create mathematical models of large-scale innovations
• Ground the model in real-world conditions and environments with empirical data
• Estimate performance, costs, potential failure modes using advanced software
• Present a compelling graphical story of the innovation with 3D visualization.

Sources and Additional Information:

My video interview with Cedric Simard on CollaborativeInnovation.org

Ice Dream Project

“Dassault Puts Inventor’s ‘Ice Dream’ to 3D Simulation Test” by Beth Stackpole

“Iceberg Transport” by Lauren K. Wolf

Point:  Use roving cross-functional teams to hunt for promising new product and service ideas.

Story:
In a world of large organizations and diverse global hotspots for R&D, innovation occurs everywhere.  Companies can tap those innovations through search processes, which may be cheaper and more effective than only using traditional “start from square one” R&D efforts.  The rationale: there may be no need to re-invent the wheel if the wheel already exists somewhere inside (or outside) your organization.

Here’s how multinationals General Mills and Whirlpool approached the search for innovations. General Mills formed two “innovation squads” consisting of six-to-eight employees selected from multiple functions. The squads are tasked with hunting for ideas from inside and outside the organization – one squad focuses on finding ideas internally, the other focuses on looking outside the organization.  The squads present the best ideas they’ve found to division heads. Once a quarter, the squads give their top 10 ideas to the company chairman.

For example, one squad found a patent for a new method of encapsulating calcium. The patent had been donated to a university. The squad converted it into a very successful new line of orange juice with added calcium that doesn’t taste chalky.

Similarly, Whirlpool designates some employees as innovation mentors – “i-mentors” – training them in innovation and tasking them with identifying promising new product ideas from across the organization. Whirlpool has 1000 i-mentors globally.  Most of the individuals self-identified and asked for the training, which consists of a formal training program that creates a common language for innovation and embeds innovation into an organizational competency the way Six Sigma training does. Whirlpool developed “how-to” guides for its innovators, including analysis of who has contact with whom [network analysis].

Action:

• Explicitly designate individuals or teams to look for innovations
• Provide innovation training to these cross-functional teams
• Cast a wide net when searching for good ideas
• Filter, refine, and present the best ideas for funding/implementation decisions

Sources:

“Unleashing Innovation,” Research-Technology Management, http://findarticles.com/p/articles/mi_6714/is_1_52/ai_n31337091/

Mason Carpenter and Sanjyot P. Dunung, “Harnessing the Engine of Global Innovation” in International Business, Flatworld Knowledge, August 2011 http://www.flatworldknowledge.com/pub/international-business/524265#web-524265

Jessie Scanlon, “How Whirlpool Puts New Ideas Through the Wringer,” http://www.businessweek.com/innovate/content/aug2009/id2009083_452757.ht

Peter Erickson, “Innovating on Innovation” Keynote Presentation at the Front End of Innovation Conference, Boston, MA, May 2009