Where do we go from here?

If John Gibson, CEO of Paradigm, is correct, the oil and gas industry is suffering from a lack of brain power. At the RMI Oifield Breakfast Forum in Houston on November 12, Gibson categorized this shortfall as an “intellectual capital shortage.”

Part of the problem is a direct result of the personnel shortage in the industry, a situation of which the industry is well aware. The high salaries and bonuses the industry has offered to entice retirement-aged people to stay have barely stemmed the tide. And those types of incentives are much harder to deliver when the industry begins to slump, which is a cyclical inevitability.

When the price of oil drops and stays low for an extended time, employers in the oil and gas industry lay off employees. The industry is looking at one of those downturns right now. And if history is any teacher, there will be people out of work.

The big problem with this situation, Gibson said, is that when things pick up again, the problem still hasn’t been resolved. Instead, he said, “We’re going to go right back into that cycle of people leaving the industry.” In fact, the problem will have worsened.

Where do we go from here?
The industry has been suffering from a personnel shortage for some time and is no closer to solving it today than it was a decade ago. If this problem is only going to get worse as a result of the present downturn, what are the options when things pick up again?

Clearly, what has been done to date is not going to work moving forward. The answer, Gibson said, is to draw on “global intellectual property.

“What we’re really interested in is a collaborative community,” Gibson said.

So how does the collaborative community come into being? According to Gibson, it is already here, and it’s called InnoCentive.

InnoCentive is a Web-based company that solicits problems that need to be resolved and publishes those problems on a secure site that is accessible to people who are interested in solving them. These people have presented their qualifications and have been approved by InnoCentive. Challenges are posted by corporations, government agencies, and nonprofit organizations looking for help with product development and other business and science problems.

The setup is fairly simple. The company matches “seekers” who are looking for answers with “solvers” who are interested in answering questions. There are 160,000 people from 175 countries registered to work on projects with InnoCentive. Each of these solvers is invited to offer solutions to any challenge posted on the site in exchange for awards that range from $5,000 to $1,000,000.

The site exhorts solvers to use their knowledge and expertise to make a “real difference.”

In addition to listing challenges by discipline, the company’s Innovation Pavilions organize challenges around specific causes or global issues, including:
• SAP Innovation and Technology
• The Rockefeller Foundation
• Clean Tech and Renewable Energy
• Global Health
• Public Policy and Citizens in Action

Gibson presented an example from industry – a Canadian mining company that wanted to identify gold prospects.

In this case, 1,400 solvers rose to the challenge, suggesting solutions to the problem. In the end, the answer the company selected resulted in an 80% success rate in prospect identification. The mining company paid only for the answer it selected and got the answer needed in a fraction of the time that would have been invested internally to solve the problem. The most interesting thing about this example, Gibson said, is that the solution did not come from within the mining industry.

Viewing a problem from a different perspective can often prove valuable. Often, technologies being applied in one industry can be used to solve problems in another. Gibson believes that the oil and gas industry will draw its greatest transfer technologies from the metallurgical sciences, medicine (where there have been enormous strides in imaging), the defense industry, and high-performance computing (which could provide automated interpretation for the seismic industry).

In support of his proposal, Gibson paraphrased Albert Einstein, who said, “We can’t solve problems by using the same kind of thinking we used when we created them.”

Another of Einstein’s famous quotes could well follow the one Gibson chose. That is, “You can never solve a problem on the level on which it was created.” Taking the oil and gas industry’s problems to a new level may well be the necessary step that has to be taken to solve them.

InnoCentive is one of a number of companies that is pushing the present boundaries by expanding its reach through the Internet. The success of companies that have used this innovative approach to problem solving speaks to the potential of this new way of collaborating.

(To find out more about InnoCentive, visit http://www.innocentive.com/.)