“People today could not possibly believe the degree of inward-lookingness that there was in the companies [of the 1960s],” Mr. van der Heijden told the 30th anniversary celebrants gathered in London last October. “Suddenly Pierre and Ted came in and showed us that you could open the window and look at the world.”
During 1972 and early 1973, the Group Planners’ message percolated through the global Shell organization: The oil price could soar from its current $2 per barrel to an unimaginable price of as much as $10 per barrel. (Actually, by 1975, it would hit $13.) Despite resistance from some Shell managers, the organization began to put in place many of the commonsense, mundane frugalities that had been lost amid the frenetic growth of the 1950s and 1960s. This put Shell in an enviable position when the crisis did occur, and an even more enviable position during the Iranian revolution of 1979, when the oil price soared a second time, up to $37 per barrel. As the shock from that shift subsided, the industry entered a bubble. Through the early 1980s, oil traders assumed the price would keep rising; they kept bidding for oil futures and driving the price higher.
Once again, in the early 1980s, Shell’s planners offered a counterintuitive message: They said the bubble would collapse. The forces holding OPEC together would fragment, energy demand would finally slow down, and the industry would have to retrench. Mia de Kuijper, one of the young planners of that era, proposed that oil was about to become a commodity product. This was a shocking notion to many executives because it meant, as Ms. de Kuijper later noted, that “a trader in Rotterdam would have more to say about the price of oil than the managing directors.” Ted Newland actually stood before the Shell managing directors in 1982 and intoned a nursery rhyme to describe OPEC’s impending disarray: “Humpty Dumpty sat on a wall. Humpty Dumpty had a great fall.” As the price fell over the next three years, it set in motion an industry consolidation that eventually swallowed three of the major oil companies known as the “Seven Sisters.”
Mr. Wack and Mr. Newland left Shell in 1982. Mr. Wack began consulting for Anglo American, the South African mining corporation, on its efforts to globalize. One of his fascinating insights involved the effect of apartheid on the price of gold production. He said, “South Africans live with the feeling that they are blessed with a geological miracle: their gold and diamond deposits. But it is actually a human miracle: People work in horrible conditions for very low wages. ‘Be careful,’ I told them. ‘You are going to be the highest-cost producer, because this human miracle is not going to last.’ ”
To Anglo American executives, Mr. Wack seemed to be predicting the end of apartheid, and they wanted to hear more. So did their spouses; indeed, they wanted to know if there was a future for their children in South Africa, or whether they should emigrate. An Anglo American executive named Clem Sunter picked up the challenge, and, inspired by Pierre Wack, he suggested two scenarios for the country: A “low road” scenario in which the whites fought to hold on to apartheid, and a “high road” scenario in which they accepted the inevitability of a multiracial society and pushed for the kind of widespread economic growth that would allow such a society to thrive (in part by bringing South African business back into the flow of the international economy). Mr. Sunter’s 1987 book, The World and South Africa in the 1990s (Human & Rousseau Tafelberg Ltd.), became a bestseller in South Africa during the late 1980s and early 1990s, second only to Nelson Mandela’s autobiography Long Walk to Freedom. It is credited with helping South Africa’s white population see the value of a peaceful transition from apartheid.