To deal with uncertainty: a lesson from Shell

Shell is, probably, the most emblematic case of application of Scenario Planning, having used this methodology (widely divulged in the business circles from the 60´s onwards) in his success route through the instability of the oil market.

In the beginning, Scenarios were not more than evolutions of the traditional approaches, meaning that, instead of a unique linear prevision, a probabilistic evaluation of different futures was carried out, identifying a projection as the most probable.

Starting from the recognition of this system’s failures, Shell started to base its Scenario Planning on qualitative causal thought (moving away from linear projections), appealing to the need felt by decision-makers of understanding and anticipating the structural changes of the society. Using the method of Herman Kahn (the precursor of Scenario Planning in the USA), namely when it comes to distinguishing between uncertainties (crucial) and pre-determined elements (that can be anticipated), Shell built multiple histories of plausible futures (Scenarios) which could be used to test strategic decisions and options. Therefore, each Shell project was evaluated in terms of two or three Scenarios (considered as equally plausible), generating two or three different results for the company (one for each Scenario). The decision to proceed or not with the project was taken according to the different results of the projects, tested in the several Scenarios.[2]
Scenario Planning strengthened the construction of projects and the decision-making, testing it against a collection of alternative futures. This added value, that is not the only one of Scenario Planning, is more and more decisive in a business context (and also, for example, in the regional and cities context) which is more complex, competitive and uncertain, where the anticipation and perception of structural changes (for example, in the markets and technologies) can mean a huge difference between success/survival and unsuccess/ decay.


[2] For a more detailed presentation of the evolution of Shell’s Scenario Planning take a look at Kees van der Heijden book in which this small introduction was based on: “Scenarios: the Art of Strategic Conversation”, John Wiley & Sons, 1996”.

Exploring the Future: searching for a new literacy

In a brief way, we can define “Prospective” as being simultaneously a discipline (in the sense in which it appeals to logic and conceptual and methodological rigor), and art (in the sense in which it is only possible to learn by doing it) whose central worry is the exploration of the future.

If the capacity to “prospectivise” is innate to human beings [3], the areas of knowledge and Prospective practice go beyond this referred capacity, having as a fundamental purpose to explore the future in a specific way, namely:


Organised and Flexible (for example, conceiving and implementing modular processes through multiple tools according to defined objectives and available resources).
Systemic (searching to categorise and to interlink the different relevant elements for the analysis) and Systematic.
Consistent and structured (searching and justifying the coherence of combination between different elements: trends, uncertainties, wildcards, weak-signals, etc.).
Intuitive and Logical (combining intuition and creativity with rigor and logic).
Useful (lighting up the present and identifying challenges for the future, stimulating decision-making and framing the implementation and monitoring of strategies).

It is this attitude, capacity and need to explore the future that proves itself more and more decisive in competitive atmospheres, be it business, territorial or others. To understand the importance of development of prospective capacities (and of a new individual and organizational literacy), I suggest a “visit” to projects and organizations so different as the unity of “Insight and Foresight” of Nokia Corporation (www.nokia.com), the “Society and Technology Research Group” of Daimler-Chrysler (http://www.daimelrchrysler.com/), the project sponsored by Siemens and the approaches “Pictures of the Future” and analysis of trends developed by its Unit of Investigation and Development (www.siemens.com), to Future Management Group (www.futuremanagementgroup.com), to Z-Punkt (www.z-punkt.de), Social Technologies (www.socialtechnologies.com), to Fast Future (www.fastfuture.com), to Standford Research Institute Consulting – Business Intelligence) (http://www.sric-bi.com/), or to that which is the biggest global network of specialists in Planning and scenario thinking: Global Business Network (http://www.gbn.org/).

Think Tanks such as the Swedish Kairos Future (www.kairosfuture.com), the Copenhagen Institute for Future Studies (www.cifs.dk) and the Institute for the Future of the USA (http://www.iftf.org/), and innovative projects of reference of Territorial Prospective like the “Millénaire3” of Lyon (www.millenaire3.com) and the Californian “The Valley Futures Project” (www.greatvalley.org/valley_futures/index.aspx) also demonstrate the dynamism of this area of knowledge and action.

Finally, one should also refer the Technologic Prospective Programs of which particular attention should be paid to the project organized by the National Institute of Science and Technology Policy of Japan (http://www.nistep.go.jp/), FUTUR Project of Germany (www.bmbf.de/en/1317.php) the Foresight Project of the United Kingdom (http://www.foresight.gov.uk/); and the Future Centers / MindLabs that exist in many countries of Northern Europe, places specifically conceived to stimulate creativity, innovation and the exploration of the future.
Have a good trip.

[3] The Word “prospective” is used here in the sense of “deciding and acting taking into account the future”. This capacity is present and is applied in more or less unconscious and quotidian terms by all of us. For example, when driving a car we act with an expectation of how other drivers will behave (see Richard Slaughter, “The Knowledge Base of Futures Studies”, 2000)

What if it all goes well?

“To go well” is, of course, subjective. It is even more subjective when we are talking about European integration, with its entanglement of questions and trends and a group of actors whose interests are often distinct.
But, in this time of pessimism, it appears to me that it can be interesting to reflect about a positive scenario of equilibrium in the future course of the integration process. A scenario in which the train of integration does not suddenly brake.
Lets then imagine a group of possible evolutions for the positions of four of the key EU actors in the next decade:
Throughout the next decade, France would accept the gradual reduction of the Common Agricultural Policy’s (CAP) weight on the communitarian budget, at the same time it started a process of structural internal reforms which, while transforming the French capitalist system, would bring about good results in terms of economic growth. At the international level, French leaders would clearly understand the disadvantages of a permanent attempt of international affirmation in opposition to the USA, which would allow for the construction of a strong bond between the two powers (for example at the level of defence), empowering the dynamism of the European defence industry and of the progressive affirmation of an effective European identity of defence within NATO. This would be a France with a new generation of politicians in power (perhaps Sarkozy, perhaps Villepin), without Chirac or Jospin and very hardly with Fabius.
Germany, in spite of the economic difficulties and of initial internal costs of the structural reforms (successful in the medium term), would accept to continue to play its part as the biggest contributor (in liquid terms) towards the communitarian budget. On the other hand, already far away from the scars of the Second World War, it would assume greater international prominence, which would be reflected upon, among other things, membership into the United Nations Security Council. These evolutions could happen with a central block government in Germany led by Merkel or by CDU / Free Democrats coalitions (with or without the Greens) or SPD with the Greens.
An EU that would be closer to the USA (more of a partner, less of a rival) would lead to a greater popularity of the EU in the United Kingdom. This improvement of EU’s image would have as is most remarkable facts the gradual reduction of the “British rebate” and, especially, the United Kingdom’s support for the “Economic and Monetary Union”. The natural successor of Blair (Gordon Brown) seems to be the suitable person make these evolutions possible, which would presuppose the continuation of the prolonged absence from power of the Conservative Party.
Lastly, the Netherlands, fearful of migration pressures but confident of an EU which managed to persuade the UK to adhere to the euro and which accepted the reduction of the Dutch liquid contribution towards the communitarian budget, would participate in the consolidation process of a collection of Europeans policies in regards to Internal and Justice Affairs (IJA). These policies would prove quite a lot more efficient than in the past, when it comes to, for example, immigration control (leaving, however, some room for maneuver by the member states). This Dutch evolution would implicate that populists would be keeping away from power and, probably, that the Liberals would have a key-role in the government’s coalitions.