Even if they can manage the risks of difficult weather and a remote location, project teams will
have yet another challenge: planning for and controlling a high number of contractors, all of whom
can affect the project’s outcome, Dr. Bea says. With many contractors and subcontractors in the
mix, each with their own organizational habits and standards, it is crucial to preserve a commitment to quality to avoid some very significant uncertainties.
Shell experienced that uncertainty during its Arctic exploratory project of 2012, when a contractor’s drilling rig ran ashore; the contractor was fined US$12 million. That mishap put an end to the
project and a years-long damper on Shell’s efforts to drill again in the area. To avoid a similar fate
this time around, Shell will have to be “extremely redundant” with the standby safety equipment it
can quickly ship to the region if an accident does happen, Mr. Mellen says.
That preparedness will also help mitigate another difficulty: concerned environmentalists. To
address their concerns, oil groups have trained workers to avoid accidents and quickly cap uncontrolled releases of oil, according to the American Petroleum Institute.
But while Shell says it now has managed safety and cost risks, its current project hit a hurdle this
year when it discovered a breach in the hull of a ship that carries spill-response equipment. Shell
made a similar mistake as the one Exxon made back in 1989: trying to take a shorter path through
too-shallow waters, Dr. Bea says.
“That’s a lesson I thought we learned from the Exxon Valdez,” he says, adding that Shell will have
to do a better job of learning from past lessons to manage the long list of risks. —Novid Parsi
Large organizations can encourage entrepreneurship
in three main ways:
“The Arctic holds
what we believe are
the last remaining
of oil, but they’ll
be the hardest to
the costliest and
—Foster Mellen, Ernst & Young,
Wilmington, North Carolina, USA
Source: Start-Up Innovation: Inspiring Business Transformation, Business Performance Innovation Network and Tech Mahindra, 2015.
Methodology: 250 enterprise business leaders and innovators across North America, Europe and Asia were surveyed online.
ROADBLOCKS TO CHANGE
Established organizations’ biggest obstacles to innovation include:
THE MOST DISRUPTED
The industries most affected by
startups and new Internet-driven
business models are:
24% Lack of clear CEO/
board mandate, commitment and support
and concerns about
structure and change-resistant mentality
56% Management politics,
functional competition and
sales and marketing
21% IT solutions
54% Creating “
34% Investing in
HOW TO COMPETE
The following strategies can
help established organizations compete with startups,
47% Source talent and technology from entrepreneurial ranks