Organised by the British Academy of Management, UK OR Society and Shell International
London, 3 June 2015
28 October 2015:
The British Academy of Management and UK OR Society organised a scenario planning workshop hosted by Shell International.
Among other speakers, Cho Khong (Chief Political Analyst) and Martin Haigh (Senior Energy Advisor) from the Shell Scenario Team provided a first-hand overview of the famous Shell scenario development activities.
Fig. 1. Pictures from the “Second Workshop on Developments in Scenario Planning”, 3 June 2015
Topics and insights from the Shell Scenario Team include:
- Shell scenario horizons are divided into short-term (events/problem specific; 2 years), medium-term (country/business specific; 5-15 years [Shell reviews around 6-8 country forecasts per year]), long term (business issues; 20 years) and very long term (issue focused; 50 years);
- The team developed multiple scenarios, but reduced them to two in order to enable a more effective engagement with stakeholders;
- The two final Shell “New Lens” scenarios “Mountain” (a top-down, government driven scenario around market forces and power) and “Oceans” (a decentralised, innovation and reform driven scenario) are built around the six key scenario drivers 1) population, 2) economy, 3) environmental pressures, 4) technology, 5) resource availability, and 6) people choices;
- Scenarios should always start with the customer (for instance, their “needs and decision-making process re energy choices”);
- The Shell “World Energy Model”, a linked data model, uses above six drives plus 75 scenario based levers, all mapped in Excel;
- Once developed, scenarios are presented across four dimensions: 1) sectors, 2) countries, 3) fuel types, and 4) time (years);
- Getting the timing right in scenarios is extremely difficult: “what is the trigger point that will make it actually happen?”; and
- The biggest challenge at Shell is to “…get the organisation acting from the insights of scenarios”, to recognise blind spots and support management in decision-making.
Investment levels, processes and tools at Shell to build scenarios and communicate outcomes are impressive (20 team members are employed in Shell’s Scenario Team). However, it is a quantitative, data driven approach. Shell’s “scenario story” is a bolt-on (developed in a workshop) to the quantitative methods applied and results generated.
Prof Gerard Hodgkinson (Warwick Business School) closed the session with a wonderful statement: “As we have limited cognitive capabilities, scenarios help us to overcome these limitations. Mental stimulation is a key enabler to learn from scenarios as scenario presentations on their own don’t do anything”.
In the Future Screening framework, this component is referred to as the “Foresight Continuum”: A foresight driven planning process fosters open debate and reveals more divergent scenarios for consideration; employees are more willing to present and discuss ideas and hence re-energise strategic conversations and support innovation.