Organizing for Innovation and Innovation Processes - The Statoil Way of Innovation
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Increasing costs and a recent decrease in the oil price, challenge the profitability in the oil and gas industry and pressure the industry to think differently. Innovation is important for companies to be able to adapt in changing environments and ensure future growth. Organizational design is the mediating variable that connects strategy and innovation, and what is often challenging is that the design must be adapted to the nature of the task being performed, in this case innovation. The purpose of this thesis is to study how large and innovative companies organize for innovation, using Statoil ASA and its innovation unit as an example. Statoil is a particularly interesting company because it is the largest company in Norway, and the oil and gas industry has a significant impact on the overall Norwegian economy. Through a qualitative and exploratory case study, information was gathered in 18 semistructured interviews with members of the innovation unit and other key persons currently or formerly connected to it. The literature review provides a framework for formal and informal organizational design, and presents structure, processes and culture as important organizational building blocks. Further, the case description provides a unique and detailed description of how Statoil's innovation unit (INN) organizes their innovation processes through five innovation initiatives: Blue Sky, Better Start, Innovation Advisory and Special Projects, Open Innovation and SpecTECHular. INN is a support function, and acts as facilitators in the early development phase of innovation projects where they apply their methodology, the Statoil Way of Innovation. A cross-case analysis of their stage-gate models show that the initiatives have their distinct focus and goal, and facilitates different types projects. However, using frameworks from portfolio management theory to categorize INN's projects in terms of market and technical uncertainty, show that all the initiatives facilitate several types of projects. Common for the initiatives is that they apply the same methodology, but they apply it in different sequence and emphasize various activities, which proves that their have an adaptable model. Finally, the discussion shows that the unit's structural location prevent them from living up to their mandate, and that the total innovation value chain could benefit from the unit's involvement also in development and implementation activities. There are different ways to organize for innovation and even Statoil, a company renown for its innovation capabilities, experience challenges in their innovation processes and has to adapt their methodology according to the situation. INN's strength lies in their methodology that is intuitive, robust and adaptable. The initiatives perform a variety of innovation activities, and the unit has a flexible culture and process that allow them to navigate in a changing environment. The innovation unit has an essential role in fostering innovation activities in Statoil, and its initiatives are both individually and as a whole contributing to make Statoil better shaped at delivering on innovation.