5. “Typical” Diffusion of Innovation
2.5% 13.5% 34% 34% 16%
2.35
1.35
0.35
Late
Early Early Laggards
Innovators
Majority
Adopters Majority
Source: Rogers & Shoemaker, Communication of Innovations
5
6. Oilfield is MORE willing to try
Which of the following best describes your company’s perspective on adopting new technology?
Try to be a pioneer /
23%
break new ground
Early adopter, but not
37%
initial risk taker
Cautious / try new
technology after it has 32%
a track record
Risk intolerant / use
only after proven and 8%
established
Source: 2008 Gulf Research: Accelerating Adoption of New Technology
6
7. Barriers Are “Manageable”
Only 50%
Of Buyers indicating that:
Procurement
Difficulty Finding the Right Wells
Reluctance of Change
Were Important Barriers for New Technology Adoption
Source: 2008 Gulf Research: Accelerating Adoption of New Technology
8. Customers Need Clear Relation to Problem
• “Prove that it can save you money and make money at the same
time.”
• “Shown performance, quality testing and honesty about the product
(e.g. limitations and reliability).”
• “Being upfront with the accruable total benefit from deploying such a
technology and demonstrating it is no marketing propaganda - that
the new technology will indeed add great value.”
• “Better to have a workshop of technical professionals from different
exploration and production companies and give detail presentations
to them and let them discuss its pros and cons.”
8
9. …And Help Them Reap Benefits
74%
say providing technical assistance
would help increase the rate of new
technology adoption
Source: 2008 Gulf Research: Accelerating Adoption of New Technology
10. Not Knowing Your Market Comes at a High
Price
• Bringing products to market is the most expensive
activity of the product development process
• Managing the risk of new product failure involves
planning, optimizing product/service and price
packages, launching, and adapting to responses
• Successful new product launches require market insight
involving a holistic approach where
operations, technology, sales and marketing play a role
11. Critical Success Factors
• Seek differentiated, superior products based on customer needs
• Up-front homework pays off, so examine your markets globally
• Build-in the voice of the customer, using advanced qualitative techniques
• Demand sharp, stable and early product definition with early input from
Customers
• Plan and resource the market launch early in the game to focus on the
Champions
• Build tough go/kill decision points into your process – a funnel, not a tunnel
• Organize around true cross-functional project teams and be sure to include
international representation, not just North America/North Sea
• Attack from a position of strength, so you need to understand your
reputation and associated perceived risks
• Build an international orientation into your process
• The role of top management is central to success
• Strengthen your global brand to earn customer trust
-- Adapted from Cooper & Edgett, New Product Development Institute
13. Who’s Doing it Right?
• Schlumberger
• Weatherford
• Baker Hughes
• Halliburton
Rated most effective at
introducing new technologies
Source: 2008 Gulf Research: Accelerating Adoption of New Technology
14. Schlumberger
WellWatcher
• Plan and resource the market
launch early in the game to
focus on the Champions
• Organize around true cross-
functional project teams and
be sure to include
international
representation, not just North
America/North Sea
15. Weatherford
Motorized Cutting Tool (MCT)
• Up-front homework pays
off, so examine your
markets globally
• Attack from a position of
strength, so you need to
understand your
reputation and associated
perceived risks
16. Baker Hughes Drilling Fluids
MICRO-CURE
• Demand sharp, stable and
early product definition with
early input from Customers
• Plan and resource the
market launch early in the
game to focus on the
Champions
18. Making the Case for More Funds
• Warning – R&D Expenditures
are a trailing indicator to
revenue growth
• But it does indicate a
commitment to evolving the
company
• Separate “creation” from
“deployment”
• Always compare apples to
apples
19. Research and Engineering
(in millions)
800
700
600
500
Research and
400
Engineering
300
(in millions)
200
100
0
2005 2006 2007
Source: 2007 Annual Report (Page 45)
http://library.corporate-ir.net/library/97/975/97513/items/281510/AR07.pdf
20. Research and Engineering
(in millions)
500
400
300
Research and
Engineering
200
(in millions)
100
0
2005 2006 2007 2008
2007 Annual Report, Page 13 /
http://investor.shareholder.com/bhi/ar2007/bh_annual.html
21. Research and Development
(in millions)
350
300
250
200 Research and
150 Development
(in millions)
100
50
0
2005 2006 2007
2007 Annual Report, Page 12 http://thomson.mobular.net/thomson/7/2738/3328/
22. Research and Development
(in millions)
200
150
Research and
100
Development
(in millions)
50
0
2005 2006 2007
2007 Annual Report, Page 26 / http://library.corporate-
ir.net/library/77/777/77782/items/292723/WFT07-AR0608.pdf
25. Market Information is Critical
• 80% of the new product successes gathered and used
more market information
• 75% of the failures knew less than average about the
market at project inception and gathered/used less
market information during the product development
process.
-Ottum and Moore, Journal of Product Innovation Management
26. Market Insight Techniques You Can Use
• Needs Identification
– Customer Advisory Board
– Experience Mapping
– Site Visits
• Estimating Demand
– Segmentation Analysis
– Conjoint Analysis for Feature Optimization
– Choice Tasks for Pricing and Prioritization
29. Importance of Strategic Thinking in 2009
• Creating New Products
– Create, then sell?
– Collaborate, then use?
– Understand, then execute?
• Deployment
– Beat the Market
– Niche Approach
– Delay
• Monitoring
– Number of killed projects
– % revenue in new products
30. Summary
• Economic Troubles Don’t Make
Our Jobs Easier
• Look to Practices of Leading
Companies and Critical Success
Factors
• Examine Your Commitment
• Understand Your Customer
• Be Strategic About Deployment