Week of 4 November 2019: Innovation

Jim Thompson

Week of 4 November 2019: Innovation | Nip Impressions, Jim Thompson, quality, industry, safety, energy, environment, innovation,

Email Jim at jthompson@taii.com

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This is innovation and strategy month here at Nip Impressions. The sources of innovation (which can either lead or lag a strategic vision) are many. These days, it is popular to do innovation in an institutional environment with government or other deep pocket funding. That's OK, however there is another way of which I am fond. That is when we do innovation out of necessity or when a bright entrepreneur has an "Aha!" moment. Here is one of those.

Starting in the 1700's and up to about 1850, whale oil was the primary source of illumination in the home. It was very popular and very much in demand. The demand was so high, in fact, that sperm whales were facing extinction. Of course, in the unregulated world of the time, this could have run its course and today we would be looking at pictures of sperm whales, not real sperm whales which still exist because the story I am about to tell you.

What saved the sperm whale? Oil. And the ability to distill kerosene. The peak year for whale oil production was 1844. In 1846, there was the first public demonstration of kerosene made from coal. Following right behind this, in 1851, was the development of petroleum kerosene. The world's first commercial refinery (distillation column) came along in 1853 and the first modern oil well in 1854.

In 1856, whale oil prices peak and in 1858, 64% of whalers fail to make a profit. Kerosene and kerosene lamps and streetlights took over the illumination tasks. By 1875, whale oil production had fallen to the level it had been in 1815. This is historical science and economics. You can look it up.

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In a November 2010 article in Forbes, contributor Warren Meyer says the man who saved the whales was John D. Rockefeller and he further suggest there should be a picture of Mr. Rockefeller in all Greenpeace offices, as a tribute to his development of the modern petroleum industry and the saving of the whales. I wouldn't hold my breath.

Today, we think of Mr. Rockefeller and his Standard Oil Company in terms of gasoline, diesel and other modern products. The truth is, by the time the automobile came along, Mr. Rockefeller was in his declining years. He made his money in illumination using kerosene to replace whale oil--it was his "Aha!" moment. Now, I am not going to say he did this out of any love for whales; it was raw, cutthroat capitalism and his vision of an opportunity at hand.

Mr. Rockefeller implemented his vision in such a successful way that the government took him to court to break up the monopoly he created from illuminating fuels. Remnants of his successful innovation still exists today, over 150 years later, in the form of Exxon Mobil, Chevron, Marathon, BP and others. Other pieces were Vaseline, Pennzoil and more.

This is real innovation. Saved the whales and built a worldwide industry. Didn't take a laboratory to do it, just one man with a vision.

For safety this week, we still have open flame applications, just like the kerosene lamp of 150 years ago. Treat them with respect.

Be safe and we will talk next week.

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