Unlocking Corporate Innovation for the Energy Transition

Galp is a 150-year-old energy multinational headquartered in Lisbon, Portugal. Because of its commitment to the energy transition, they created a new innovation team that consists of a small and diverse group of individuals from different backgrounds and nationalities, mostly recruited from outside the company.

The innovation team at Galp is structured according to the company's three business units: production and operations, renewables, and commercial (including petrol stations and electric mobility). They have three innovation centers, one for each business unit.

First, they identified tech trends, leading to technology radars for each business unit. These trends then were prioritized in roadmaps, following the Three-Horizon framework. Their mandate so far has been primarily to focus on Horizon One (70%), yet to also balance current needs with future opportunities in Horizon Two (20%) and Three (10%). Across the three units, for the company overall, the team always keeps in mind digitalization, optimization and decarbonization. That roadmap typically reflects a commitment for a 12-months period ahead.

Given their mandate, the team collaborates closely with the business and as such, alignment is crucial. They work with a pre-approved budget provided by the business units. They tackle topics selected by the business units, which could involve pilot projects, studies, or education on specific subjects. Reporting and transparency are important aspects of the model, with monthly meetings and detailed reports on project status and budget monitoring.

The hybrid governance model fosters a sense of co-ownership and aligns the team's efforts with the company's goals. The team follows an agile process with decision guides and steps for pilot projects, aiming to launch them within three to six months. They act as challengers, addressing big topics and regulatory frameworks, and enablers, conducting agile pilot testing and embracing failure.

The innovation team takes on the responsibility for testing new ideas and projects, as it is easier for them to accept the blame if something fails. In contrast, the business units may not have the same tolerance for failure.

They use a funnel approach, starting with ideas from the external ecosystem and then filtering them down to a smaller set of projects that are aligned with the business unit's goals and have the potential to bring value to the company. Some projects may be closed or killed, but the team values the learning and knowledge gained from each endeavor.

While there is alignment on the roadmap and mission, scaling up the innovation projects within the business units presents challenges due to their limited resources and focus on core operations.

Currently, there are 61 ongoing projects, and the team expects some of them to be scaled up. One example of a project is testing second-life batteries, which explores the use of lithium batteries from Nissan cars that have reached the end of their lifespan. These batteries, though not suitable for powering electric vehicles, are being repurposed as buffers for ultra-fast chargers, which require medium voltage not typically available at service stations.

Galp's Collaboration Approach

The team adopts an outside-in approach, collaborating with external partners such as R&D centers, academia, startups, and scale-ups. They rely on these external collaborators to bring in new ideas and technologies from around the world. This approach allows the team to leverage specialized knowledge and resources beyond their own team of 25 members.

The business units, as they are particularly focused on legacy operations, have limited time and resources to dedicate to innovation. Therefore, the innovation team serves as an "innovation-as-a-service" provider, taking on the responsibility of driving innovation in Horizon One projects.

While the current focus is on supporting Horizon One innovation, the team recognizes that their role will evolve over time. Their aim is to help build capabilities and a shared language within the business units so that they can eventually take ownership of their own innovation efforts in the future.