Keywords

1 Introduction

Project managers often consider their projects’ success to be met if they completed the project on time or even ahead of schedule, within budget, and fully compliant with set scope and quality. This has notably been referenced as project triple constraints: Time, Cost, and Scope. (Shenhar & Divr, 2007) (Fig. 1).

Fig. 1.
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Project Triple Constraints (Shenhar & Dvir, 2007)

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It is difficult to define “Innovation” as a management competency since, in business terms, innovation is the translation of an opportunity to a doable and feasible product. Conventional project management models concentrate on delivering projects and achieving set deliverables with a well-defined set of measurable execution strategies and success criteria. Unfortunately, this was considered with inadequate attention to creative thinking, where opportunities for innovation generally center on a reflexive problem-solving mode. For example, during the execution stage and when the project manager faced risks, he generated a mitigation plan to avoid the consequences of such risks or minimize the adverse impact generated in the project (Gallagher, 2015). The paper aims to discuss the challenges and enablers that face diffusing innovation processes and measurements on performance and efficiency in the context of project management in the energy sector. The research aimed to answer the following question:

How does the Innovation Process contribution influence the performance and efficiency of the project management, considering the challenges and enablers for adopting innovation within the oil and gas sector?

In subsequent sections, the study will explore two key areas: theoretical background and research framing. Theoretical background will comprise the literature review of the innovation theories, innovation process concepts and models, individual acceptance theories, project management, and critical enablers. The research framing will consist of theoretical framing, highlighting the existing researchers’ studies concerning challenges and opportunities in adopting innovation systems within the oil and gas sector. Finally, the conceptual framework will be proposed for this paper, given the previous works conducted by introducing additional specific variables and dimensions related to the oil and gas sector.

2 Theoretical Background

The primary study dimensions to assess the key challenges facing the implementation of the “Innovation Process” within the ecosystem of the energy sector and the correlation between the adoption of “Innovation Processes” and “Individuals Acceptance” in the project management contribution.

2.1 Innovation Concept and Process

Innovation terminology creates something unique and valuable and adds new value to end users. Innovation is not synonymous with invention, which is related to generating new products; however, innovation is about creating value for customers. One interesting comparison of the two acronyms is that invention is the transformation of cash into opportunities, while innovation is the conversion of ideas into revenue. (Burmester et.al, 2005).

The innovation process mainly consists of three main stages: the front end of innovation, product development, and implementation. The front end is a detailed stage focusing on several sub-elements in terms of problem definition, exploring ideas, scope generation, marketing assessment, and the final stage, resulting in building a feasible business case. The front-end phase is considered the most essential part of the innovation process for proceeding with options to be further considered in the following stages of development and commercialization.

2.2 Innovation Theories and Models

The field of innovation management is broad and has several facets. Although innovation is sometimes viewed as an ethereal idea, it is a diverse subject of study with many models, theories, and frameworks. One method to characterize innovation is to divide it into two groups depending on the market it serves and the technology it employs. The innovation matrix model allows us to see the most prevalent forms of innovation, as illustrated in Fig. 2. Incremental innovation only makes minor adjustments to an existing product formulation or service delivery strategy, making them marginally better than the prior iteration of the good or service. Disruptive innovation is widely used by various industries where a concept, product, or service establishes a new value network, either by upsetting an established or brand-new market (Christensen et al., 2013). On the other hand, sustaining innovation is market-based and, rather than developing new value networks by meeting consumer demands, enhances and expands existing ones. Finally, radical innovation is uncommon since it has traits of disruptive innovation but differs in that it utilizes both a novel business model and a revolutionary technology simultaneously (Linton, 2009).

Fig. 2.
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Innovation Matrix (Linton, 2009)

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Another critical theory that is considered the basis of establishing the conceptual framework of this paper is the diffusion of innovations theory (Fig. 3). It measures the flow of newly generated opportunities through an existing ecosystem. Initial research explored that diffusion ideas were widely spread within consistent social gatherings such as families and communities. The main drive of these early studies was to promote personal innovation by focusing on behavioral adoption. These studies were further developed to examine the diffusion of more complicated advanced technological innovation on a larger scale, such as business processes and information systems, such as the health sector and education organization (Ven et al., 1999).

Studies contended that the innovation adoption process is more complex in organizations than among individuals. The innovation process is categorized into five main phases, recognized in two leading platforms: initiation, which includes setting an outline, and implementation, which includes redefining/rearranging and clarifying. Given this theory, the new directives emphasized the recreation of the innovation tools to correlate to the organizational context to generate new practices for innovation that add value to the organization and contribute to success factors. However, recent research concerns the innovation process to cross firms’ borders with a broader spectrum of external domains, including projects, markets, and environment (Rogers, 2010).

Fig. 3.
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Diffusion of Innovation Model (Rogers, 2010)

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2.3 Individual Behavior Acceptance

The Theory of Planned Behaviour (TPB) has, since its development some 20 years ago, proved to be a powerful approach to explaining human behavior. It has been successfully applied to a wide range of behaviors. Interestingly, particularly complex behavior, such as managerial decision-making, saw only a few attempts to use TPB. Creativity thinking has been highly acknowledged as a primary component in driving employees’ success and ensuring organizations’ sustainable and viable advantage in fast-changing and challenging business environments (Anderson et al., 2014). Team climate for innovation is considered one of the vital critical factors of employee creativity, emphasizing the support and reward of team efforts. However, earlier studies need more attention regarding the contribution of personality in influencing team climate for innovation.

3 Research Framing

3.1 Theoretical Framework

In several literature contexts, the emphasis on process innovation is characterized by two primary constructs: Technological and Organizational innovation. Technological process innovations are tangible outcomes, such as products enhanced through technical improvement processes with extra functionality and benefits. On the other hand, organizational process innovations are intangible strategies related to process establishment, work environment, cultural ecosystem, and creative thinking frameworks (Edquist et al. 2000). Theoretical framework formulation was conducted utilizing factor analysis and empirical research based on three main theories contributing to the influence of the Innovation process on project performance and success factors. This includes Institutional theory, behavioral theory, and attribution theory. The central underlying notion of institutional theory is that structures with formal procedures, standards, and regulations enforce an authoritative framework on social behavior and interactions where Organizational processes can either support or constrain innovation (DiMaggio and Powell, 2012). The behavioral theory emphasizes stability development by reducing misalignment and conflicts in achieving objectives by establishing strategies that comply with constraints. Companies’ reaction to performance discrepancies is examined through attribution theory (Ford, 1985). The attribution theory arguments have shown a connection between the intensity of a problem-solving effort and the value and uncertainty of an output (Weiner, 1986). Senior managers should consider innovation a viable remedy in the event of organizational decline, provided causal attributions relating to the stability and controllability of the fundamental causes are made (Rahimi et al., 2018). During the project life cycle, from initiation to the completion and handover, the project manager will dynamically generate all possible opportunities and ideas that add value to ensure achieving the set targets and objectives results are achieved. Due to the fluctuation in the market condition, fast technological progress, population growth, and high resource demand, innovation has become a core competency for project managers.

On the other hand, organizations face challenges in developing and implementing a robust innovation process as part of their ecosystem, such as (Gallagher, 2015): Risk, resistance to implementing new ideas to avoid risks to the organization and maximize the utilization of proven practices. Lack of knowledge means that many organizations need the tools to be innovative, so they cannot develop new ideas. Time constraints, where organizations adopt “reaction mode” “troubleshooting” problems, leave an inadequate period for creative thinking, innovation, and root cause analysis. Creativity is time-consuming, where the mind should expand thinking about the problem and imagine solutions from a different dimension with proposed links for the final compelling idea for implementation. Organizational structure and size research has shown that once companies get large, they become less risk-tolerant and less willing to innovate (Deeb, 2014). Innovation mandates a culture of collaboration to be an organization’s DNA, enforces the importance of creative thinking, and is based on team skills and expertise rather than their positions and authority. Influencing and building trust from leadership must be conducive to encouraging the implementation of the innovation process within the organization (Larson, 2015). Figure 4 illustrates the summary of the theoretical framework.

Fig. 4.
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Theoretical Framework for Project Performance in the context of Innovation Process, risks, opportunities, and theories.

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3.2 Conceptual Framework

According to Rogers’ theory of disseminating innovations, five factors—relative benefit compatibility, complexity, trial-ability, and observability—influence the acceptance rate. In this paper, we added a third attribute that needs to be tested: individual acceptance influence on the contribution of the innovation process. Thus, it is determined that the dependent variable is the performance defined in terms of financial performance, and the independent variables are a technological factor, organizational factor, and individual behavior factor. Four central hypotheses were developed as follows:

Technological Factor

O&G relies on proven technology to monitor and control process facilities and remotely develop large-scale database and security systems (Lappi et al., 2019). The smooth and effective integration of robust, high-speed, reliable, friendly use, and maintenance-free technology will strengthen the buy-in from all stakeholders in adopting the innovation process within an existing business model. This will positively accelerate decision-making, expedite deliverables completion, faster communication, time-saving, high efficiency, and maximum productivity (Almarri K., 2023).

Therefore, the first hypothesis is speculated as follows:

  • H1: Technological factors will influence the adoption of the innovation process

Organisational Factor

Adopting an innovation process in the majority of an organization may lead to paired contrast impact, generating a motivation for innovation development, but on the other side, causing outrage in the business that could lead to risks. The continuous nature of innovative changes requires organizations to involve all available resources in the innovation process constantly. However, their size could be improved and sometimes needs to be improved to achieve consistent innovative transformations in the economic system. This causes the emergence of many stochastic processes that, due to their unpredictability and weak controllability, negatively affect the effectiveness of innovations (Zotov et al., 2020). Therefore, the second hypothesis is speculated as follows:

  • H2: Organisational factors will influence the adoption of the innovation process

Individual Behavior Factor

Personality differences are affecting the adoption of the innovation process. Individual willingness to try new things and risk aversion influenced the promotion of creative thinking. A positive attitude adds value to the business unit, company/firm, or industry. Individual behavior includes several factors such as motivation, trust, mindset, fear, social norms, self-image, risk perception, familiarity, acceptance, agility, etc. (Robert and Flin, 2019). Therefore, the third hypothesis is speculated as follows:

  • H3: Individual Behaviors influence the adoption of the innovation process

Project Performance

The hypotheses consider one of the two intellectual streams: essential (in need) and available. The essential stream claims that low-performance organizations or projects strive to implement innovation to improve adverse circumstances (Amabile & Conti, 1999). One of the primary project performance indicators is financial performance in terms of return on assets (ROA) as a profitability ratio to measure financial success. In contrast to, for example, return on equity, ROA is more relevant as a profitability indicator since it illustrates how assets or resources are used to create revenue instead of investments because oil and gas firms are often capital intensive (Merrow, 2012). Therefore, the fourth hypothesis is speculated as follows:

  • H4: Innovation Process will positively affect project performance (Fig. 5)

Fig. 5.
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Proposed Conceptual Framework

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4 Discussion

Positive disruption is a crucial initiative for the organization to shift from a status quo slow position to a transformational era with high momentum in terms of productivity and efficiency. Despite the firm or organization scale, project practitioners are the engines of innovation. In the majority of organizations, the ideation process is the simple stage. However, converting those ideas and opportunities into feasible concepts and then upgrading them to the final product or service.

In order to manage a breakthrough or innovative project, it is essential to blend new ways of thinking with familiar processes. Oil and gas are innovation attraction sectors where critical businesses require safe and cost-effective solutions to meet the worldwide strategic growth plan. The research recognizes four opportunity stages to integrate the innovation process within significant projects, including the Bridging stage, an initiation stage consisting of preparation during front-end planning. It integrates innovative practices, technologies, and organizational processes to enhance project performance. The engaging stage focuses on creating an innovative incentive scheme for engaging stakeholders, establishing simplified tendering and contracting prices, and generating a reward scheme with creative thinking, crowdsourcing, and innovative solutions. The leveraging stage takes place post-contract award, and the entire supply chain is generated. Establish a platform with all stakeholders to develop new opportunities, improve practices, and enhance technologies. Finally, the exchanging stage falls after project completion, where lessons learned, and innovation history are communicated among the entire organization ecosystem to share experiences for future growth (Davies et al., 2014). The literature review observed a strong relationship between the organization, technology, and innovation in promoting digitalization and Artificial Intelligence as critical contributors to the firms’ performance enhancement. With its iterative nature, the agile approach to project management could be ideal for creative projects with a high degree of uncertainty.

Other theories emphasize the level of acceptance and buy-in from the human factor, including leadership support and employee engagement to adopt innovation and technology within the ecosystem of the organization for value generation. The following relationships are:

figure a

One limitation/gap analysis in this study that needs further development and exploration is the correlation of “Green Innovation” within the Oil and gas sector on the company’s performance. The link between green innovation and the market for energy-related products has drawn more attention as environmental consciousness has grown. Miao et al. (2017) state that green innovation can increase energy usage effectiveness. In addition, the transfer of advanced technology is advantageous for lowering total energy consumption and intensity (Waheed et al. 2021).

5 Conclusion

Researchers examine the diffusion results and implementation processes to understand better and increase the market acceptance rates of innovations. The majority of organizational innovation study has been on bureaucratic companies that are hierarchically constituted and competing in single marketplaces. Organizational climate, culture, and climate-related elements impact an organization’s innovation ability. People are where innovation begins. They could be in management or professional employment. Thus, it is critical to maintain their innovation-related motivation. The culture of their workplace also impacts people. Workers’ inventive behavior would also be influenced by how they feel about their organization’s support for innovation. In order to implement the creative atmosphere, several aspects must be prioritized, including challenging work, freedom to think and adapt, time allotment, leadership support and encouragement, learning from errors, involvement, and trust-building (Prather, 2000).