Innovation strategies and leadership - organisational level

Looking at innovation in companies and organisations, innovations, either internal or external, will impact any type of organisation. Some innovations might be a menace for certain types of organisations, whereas other organisations draw their entire existence, development and competitive position from innovations according to D´etrie (1993).

On a company level D´etrie (1993) claims that technological innovations can impact the activities of the organisations (growth, maturity, value, limits, borders and segmenta-tion), on the competitive positions (cost structures, product differentiations) and finally on the very structure of competition itself (disappearance of competitors, new competi-tors emerging). Hence the way an organisation or a company approaches innovation will determine if a company is successful or eventually risking to whither away or ending up in irrelevance.

Research has shown that some types of business environments and organisations are better at nurturing innovations than others. In order to create a propitious environment Midgley (2010) claims that one has to open up for innovations in the organisation, showing direction and setting up clear guidelines. Another building block according to the theories of Midgley is to choose, prepare and support the team set to carry out the innovations, a third aspect is to create innovations together with the customers, however it has to be the right customers and at the right moment. A fourth element according to Midgley is to change the organisation that is to carry out the innovation, change management is thus a crucial part of the innovation process, and a final element is to build up a market for the outcome of the innovation process.

From another viewpoint and through another research study focusing on organisa-tional culture that stimulates creativity and innovation Martins & Terblanche (2003), put forward that such organisations can be characterised by a strategy with a common vision and purpose, second a certain type of structure, preferably flexibility, freedom, teamwork and co-operation, third support mechanisms that reward and recognise, avail-ability of resources and acceptance of risk-taking, a forth element consisting of behaviour that encourages innovation, learning and competition and finally a fifth element of open and clear communication.

Approaching innovation, not just from the perspective of a single organisation or entity, an alternative strategy to innovation can also come through the process of open innovation, defined by Chesbrough et al. (2006, p. 2)

as the use of purposive inflows and outflows of knowledge to accelerate in-ternal innovation, and expand the markets for exin-ternal use of innovation, respectively. Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.

As per this definition and point of view, innovation can come from many directions and dimensions surrounding the company or the organisation. For instance, even customers and end-users can participate in the innovation and development of new product and solutions. According to the promoters of the ideas behind open innovation, van de Vrande, Spruijt, de Rochemont & Chesbrough (2013), more and more companies are moving towards an open way of innovating. Several factors contribute to this drive, (i) people have increased mobility and change jobs more often, (ii) venture capital is available for spin-offs and new ideas to be develop outside or on the side of the existing structure, (iii) companies in the supply chain participate in the innovation process.

Open innovation is often opposed to closed innovation, Gassmann & Enkel (2004, p. 14) describes the closed and open innovation approach with the following character-istics:

Open Innovation Approach

• High product modularity

• High industry speed

• Much explicit and tacit knowledge required

• Highly complex interfaces

• Creating positive externalities Closed Innovation Approach

• Low product modularity

• Low industry speed

• Less tacit knowledge required

• Low complex interfaces

• No positive external effects through licensing

According to the supporters of this line of thinking, open innovation is catching on in today’s networked and connected environment, and Enkel, Gassmann & Chesbrough (2009, p. 311) go as far as stating that

Once the notion of inter-organizational innovation collaboration has entered an industry, everyone who does not participate will cope with serious com-petitive disadvantages.

They furthermore claim that

The future lies in an appropriate balance of the open innovation approach, where the company or the institution uses every available tool to create successful products and services faster than their competitor and at the same time fosters the building of core competencies and protects their intellectual property.

Different approaches to innovation can be identified within the open innovation set-up, for instance Shuen (2008, p. 135) has identified four different approaches. The definitions are based on various alternatives between user groups and company:

• Company to end user—innovations on a platform, open, ecosystem based

• Company to company—recombinant innovation, where different fields of technol-ogy are combined in new settings, fields or connections

• End user to end user—democratised innovation

• End user to company—innovation through combined efforts

The various theories on innovations within organisation demonstrate that there are many and different approaches in order to foster and develop innovations. This is relevant for our analysis of the strength of the innovation level within Russian oil and gas sector, and the preparedness for the Arctic offshore development. Especially the theories and possible relevance of open innovation and innovation collaboration in order to solve challenges will have to be analysed further in a Russian setting. A specific question in this regard, is to what extent collaboration is nurtured in order to overcome common challenges and innovate. For instance Russian oil and gas companies are used to be working on developing on-shore fields alone, whereas internationally, most of the more challenging projects such as subsea and offshore projects are developed through co-operation between partners and joint-ventures.