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 / Spring 2003 / Issue 30(originally published by Booz & Company)


The Man Who Saw the Future

During one breakout session, I joined a group of obstreperous firebrands (Shell’s Group Planning department has always employed some of these) on the subject of “life after scenarios.” They were keenly aware, of course, that scenarios have become a widespread consulting practice, popularized by such futurists and management writers as Peter Schwartz, Arie de Geus, Joseph Jaworski, Charles Hampden-Turner, and Kees van der Heijden — all former senior officials in Shell’s Group Planning department. There is also now a collegial network of scenario planners and consultants around the world; one Shell alumnus, Napier Collyns, was honored at the celebration for his role in fostering that network. (Mr. Collyns and Mr. Schwartz went from Shell to cofound Global Business Network, another central source of scenario practice.)

But Mr. Collyns pointed out the essential contradiction in scenario work: Shell’s original insights came from “years of deep research, rigorous analysis, ongoing conversations, and multiple iterations of the scenarios themselves” — all conducted by Shell’s mysterious and brilliant team. But over time, the method seems to have been watered down into just another three- or four-day workshop in which people feel like they’ve expanded their thinking away from the office, but still return to business as usual. Perhaps, some of the firebrands suggested, the golden age of scenarios is ending. Maybe some new methodology is needed to help companies see their own troubled futures as clearly as Shell saw the energy crisis in 1972.

I felt that if Pierre Wack were at the anniversary celebration himself, he might find the discussion beside the point. He had, after all, experienced the same sort of frustration throughout his career with scenarios, which began in the 1960s.

Thinking the Unthinkable
The seeds of scenario planning methodology were planted in the late 1940s, when the futurist Herman Kahn, then a young defense analyst at the Rand Corporation, started telling brief stories to describe the many possible ways that nuclear weapons technology might be used by hostile nations. (For this, Scientific American described Mr. Kahn as “thinking the unthinkable,” a characterization he embraced gleefully.) Near Rand’s Southern California offices, Mr. Kahn hung out with screenwriters and moviemakers — one of whom, Stanley Kubrick, used him as a model for Dr. Strangelove, and another of whom, Leo Rosten, suggested the name “scenarios” for these storytelling exercises.

But by the mid-1960s, Mr. Kahn’s methods had become a mechanistic smorgasbord approach, serving up dozens of possible forecasts (often generated with mainframe computers). The method would probably have died of sheer complexity, except that two individuals from Shell sought out Mr. Kahn. One was Mr. Wack, then head of planning at Shell Française (originally from Alsace-Lorraine, he pronounced his surname to rhyme with “Jacques”). The other was Ted Newland, a senior staff planner known for his incisive, unsentimental views of global politics. When Mr. Wack and Mr. Newland joined forces at Shell’s headquarters in 1971, they already shared two key insights. First, change in the Arab world was about to destroy the stability of the existing oil regime, which oil companies had dominated (and drawn a profit stream from) for 25 years. Second, everybody in the oil industry knew it, but nobody was prepared to do anything. With sponsorship from several far-seeing Shell managing directors, the two assembled a team to bring that awareness to the entire organization.

Scenario planning was just a starting point for them. Mr. Wack, who had studied some of the mystic traditions of India and Japan in depth, had been a student of the Sufi mystic G.I. Gurdjieff in the 1940s, and he had learned to cultivate what he called “remarkable people” around the world; this phrase in French means not so much gifted or eccentric people, but people with unconventional insights about the world around them. At that time, most oil executives believed that tensions in the Middle East would soon abate because Western-dominated stability would triumph; it always had before. Mr. Wack and Mr. Newland systematically examined every possible angle of the situation, with particular attention to the pressures faced by the ruling governments of Iran and Saudi Arabia. They concluded that it would take a miracle to avoid an energy crisis, and a set of keenly focused scenarios to make managers not just intellectually realize the danger, but prepare for it.

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