Open Innovation: What Went Wrong with BP Oil Spill Initiative?

In conjunction with the resent oil spill disaster the U.S. Federal Government and BP tapped into open innovation as one way to solve the problem. Only in a few weeks, over 20,000 suggestions were received. Not surprisingly, these kinds of open innovation efforts hardly did anything to solve the problem. Why is that? Ehsan Ehsani, researcher and consultant with Accenture in New York City elaborates on some of the reasons behind the low level of success in this open innovation initiative in his column on a current hot topic: Web-enabled open innovation.

Published: August 9, 2010 | By: Ehsan Ehsani | 14 Comments
In: Life Cycle Processes

I am sure almost all of you have read/heard about the environmental disaster which happened more than 80 days ago in one of BP’s facilities in Gulf of Mexico. A Deepwater Horizon drilling rig explosion caused a massive ongoing oil spill in the Gulf of Mexico which still continues today.

Disappointed with the outcome of the quick response actions taken in the days following the disaster, the U.S. Federal Government and BP tapped into open innovation and community driven approaches to solve the problem. The Deepwater Horizon Response Website was launched including the information and infrastructure for all volunteers and external solvers to submit ideas. According to the website, in only a few weeks, over 20,000 suggestions were received.

The community-driven efforts went beyond just a website; Bill Valdez, acting director of the department of energy’s small-business office, asked 35,000 small-business owners on his e-mail list about the solutions, and Hollywood celebrities such as Scarlett Johansson stopped by to share their solutions with administration officials on what to do to fix the leak[1].

Not surprisingly, the sort of the open innovation efforts mentioned above hardly did anything to solve the problem. So the logical question that comes to mind is: Why? In the paragraphs below, I will try to elaborate on some of the reasons behind the low level of success in this initiative and I am also eager to know your thoughts:

Reason 1: Idea review and selection is as important as idea gathering

Even though the task of idea gathering from external solvers, partners and extended stakeholder communities is important, like any other innovation system, the difficult task is sorting out the good ideas. With 20000 ideas in the basket, the amount of time required to review the ideas would definitely not be acceptable.

On the other side, the issue of having a massive oil spill requires highly skilled resources for idea review and selection, which leads into tying up BP and government resources into idea review for a long period of time, which prevents them from focusing on the problem itself.

Reason 2: Alignment issues between the nature of the problem and solvers’ profiles

The issue of having massive oil spill most likely requires a sophisticated technical solution. However, most of the solvers and people who submitted their ideas to the website lacked such background. As a matter of fact, in many similar situations, the top notch experts who might be able to offer feasible and effective solutions to such problems, are simply too busy to spend their time going into different websites and submitting solutions to different open innovation challenges.

In other words, there was a misalignment between the nature of the problem (highly technical) and the skill-set of the solvers’ network. Having analyzed more ways of reaching the right external skill-sets, this open innovation program would have been more successful.

Reason 3: The costs associated with failure are too high

In the weeks following the oil spill disaster, BP was under tremendous pressure from public, U.S. government and environmental organizations. While the first attempts to solve the oil spill were not fully successful, the company received criticisms from Obama on being ineffective in terms of solutions to deal with the problem[2].

In such situations, one can imagine how severe the costs of dealing with another failed solution would be. This means that BP needed “The Best Solution” instead of having “Many bad, OK or good solutions”.

Looking at the nature of what BP was facing, I think it would have been more beneficial to take a more controlled approach towards oil spill issue. This is also consistent with the insights provided by Gary Pisano and Roberto Verganti in their Harvard Business Review article last year “Which kind of collaboration is right for you?” which highlights the fact that companies should choose different modes of collaboration for different innovation types or business issues. As I mentioned, I am curious to know your thoughts and opinions so let us know what you think.

By Ehsan Ehsani, Product Innovation and PLM Practice at Accenture

About Ehsan Ehsani

Ehsan Ehsani is a researcher and consultant in the area of innovation and product development and one of the contributors to InnovationManagement.se. Ehsan is working with Accenture Product Innovation and PLM practice in New York City Office, he has consulted and worked with a variety of firms including ExxonMobil, Diageo, Sara Lee, Henkel, Unilever, UPM-Kymmene, Ericsson, SKF, Telefonica, Repsol, Abertis Telecom and Lego. He can be reached at Ehsan.ehsani@accenture.com

[1] Washington Post Article: http://www.washingtonpost.com/wp-dyn/content/article/2010/06/10/AR2010061005536.html

[2] MS NBC Article and video: http://www.msnbc.msn.com/id/37566848/ns/disaster_in_the_gulf/

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http://www.brightidea.com Paul Tran

We have created an idea collaboration portal to assist in the efforts. Please submit your ideas to http://bp.brightidea.com/restorethegulf

Ehsan Ehsani

Thanks Paul;

It would be good to hear from Bright Idea initiatives more in the future.

Ehsan

http://www.creman.se Christer Edman

I agree mostly but an effective Idea filtering tool should have been used since there was a lot of similar ideas posted. Or even better a smart “tag” system which help the idea creator to search for similar postings before posting the idea. Then would more unique ideas have been posted and there would also be spin off effects on already known and posted ideas. This is the same course of events in all user groups e.g. LinkedIn or FB with the same postings and in OI networks on Ning, Grouply etc.

To much time was used on discussing, judgment and arguing. A clear concept to focus on backed up by top management at BP and the stakeholders should also help. A good thing was that so many people wanted to contribute with their ideas. The lack of experts could be handled with some encouragement for their participation if better prepared with an innovation strategy.

A forgotten topic is also what we can learn from this instead of only talking about the symptoms from the leak and how to stop it. We are emptying the natures resources without asking the most basic questions as who have given us the rights to continue with the excessive pollution and stealing from the coming generations? Was this one of the natures own way of taking care of our failures with the environmental issues?

Creative problem solving don’t need the same thinking which created the problem. One of the problem with finding a creative solution might be there is an inability to think outside the known technology. It’s also important to bring in people with all kind of thinking and experiences and not only so called experts…

Ehsan Ehsani

Hi Christer,

Thanks for your comment. I really liked your technical thoughts about filtering the ideas. Smart tagging or using sophisticated data mining like what IBM Jam solution is utilizing might help from technology standpoint.

Ehsan

http://www.discoverycast.com Cesar Castro

Ehsan,

I would add that the problem that needed solving was way too broad. It would be similar to asking the crowd to design and build the next web browser or design an efficient way to desalinate sea water.

If BP would have spent some time breaking down the big problem into smaller pieces and then farming those challenges out, perhaps the idea filtering process would have been more manageable (and the quality of solutions higher).

Everyone took off trying to solve the problem without spending more time thinking about exactly what problem they were trying to solve. It’s no different that asking the crowd to find a cure for cancer.

Ehsan Ehsani

Wow Cesar,

Your idea about the problem structuring and breaking it into smaller chunks was great.

That’s an issue that many companies or business individuals don’t consider in daily work.

Ehsan

Daniel

What really struck me as a surprise when the BP-oil spill happend was that there where no precursive creativity going on in the BP risk department. A company dealing with risk in an extrem way, like drilling for oil deep down in the ocean like BP, must have plans and ideas ready to solve problems that MAY happen – before they DO happen.

These organization (like BP) must be streamed-lined in a way that can handle accidents and know exactly what to do when they occur. What I am trying to say is that idea gathering and problem solving should take place when there is still time for it – that is, when everything is workning just fine.

Organization (like BP) should therefor encurage stakeholders and others to try to come up with problems that could happen and solve them – so when they do happen everyone knows what to do.

Brita

I agree with you, Daniel. Its not only about having a Plan B and Plan C available but also about the need to take into consideration a worst case scenario.

Disaster management is not only about managing such a situation when it happens but having a plan ready for all the “in cases”.

Quite amazing that BP had nothing in place. Optimism at its height!

Ehsan Ehsani

Yes Brita,

Having resilience in business operations is one of the important things to consider. I recommend you to read the book “Resilient Enterprise” from Yossi Sheffi, an old professor of mine on this subject (If you haven’t read it already).

Ehsan

Ehsan Ehsani

Daniel,

Your point is very interesting and I will blog about it in the future.

Often times ideation systems in companies are oriented toward new product development, new business opportunities etc. but not toward reducing risks.

Keep the good comments coming.

Ehsan

Heinz

Ehsan, I agree with your summary.

By point is very similar if not the same as Cesar’s. Focus was missing. Open Innovation has proven successful primarily is situations of focused problem solving.

Surely BP had various high-level solutions that had various detailed aspects that remained unsolved. Focussed crowds could have been used to solve these focussed problems.

These things are however always clearer with the power of hindsight.

Ehsan Ehsani

That’s right Heinz,

Roberto Verganti and Gary Pisano article in Harvard Business Review with the title “Which kind of collaboration is right for you?” talks about use of the focused crowds or big crowds for different problem types.

Ehsan

http://www.innovationleadership.eu Rob de Graaf

Ehsan,

Problem here was I guess the lack of direction and frame of reference. As this is collective problem it cannot be solved by open innovation, that is too small in scope. Collective innovation is the next step, where there is room for more participants and ideas.

The US government and/or BP could be the directors of such an effort. They could then set the frame of reference in terms of what the solutions should solve, and that they would be addressing the whole issue rather than many small part issues. That suboptimizes the solution by default almost.

A good example is what we did in the Dutch bakery sector, where access bread was basically fed to the pigs. When the sector made an issue out of this and provided 2 simple rules for solutions: half the excess and double the value, many suitable solutions could be combined well. This led to new bread products for consumption, but also to recycling non edible bread for paper and energy.

Of course the problem here was more urgent to solve, but with a ready made process, it could have been addressed better, I guess. I’ll be happy to share more about Collective Innovation if you’re interested!

Rob
YGGGDON

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