IMPACT AND INFLUENCE OF SCENARIOS
So, I'm very interested
in bringing together different ideas,
and I found the scenario process
was great for that.
You wouldn't just stick in your familiar silo of economics,
you'd be talking to people outside your area of expertise
and getting different perspectives.
That's enriched my writing.
I think there's an enormous necessity
for this kind of approach,
because our futures right now are unpredictable.
Perhaps the worst temptation in scenario planning
is to think that it's about the future.
It's really not. It's really about the present.
It's about how you make decisions now.
Scenario planning can be used for multiple purposes.
The most common one I see and that we participate in
is simply stress testing an existing strategy.
Secondly, you can try to come up with new growth options,
not the existing strategy, but make this strategy better.
Thirdly, you can use it to just educate people in the organisation,
so you have a framework for better dialogue.
Shell scenarios are a unique resource
for all of us who think about
the energy future.
Like all good scenarios,
and, indeed, many of them built on that model,
they're not predictions, they're vehicles for telling stories.
But the stories they tell
to change the picture of reality
in the minds of the leaders reading them
are often provocative, fresh,
and, of course, the underlying trick
is to choose the axis correctly.
That's the hardest part.
Once you ask the questions, the answers tend to become self-evident.
I think it's been a vital intellectual contribution
to the world of energy.
I can't imagine having the progress that we now see,
in the global energy transformation,
without this important foundation.
Shell has played a very critical role,
especially in the early years,
in helping the Singapore Government
develop scenario planning
as a basic tool for strategic planning.
Without scenario planning,
we would not have gone as far as we have come,
in terms of our ability and capacity
to plan for the future.
You start from the premise of not what you know,
it's what you don't know,
and plan for those uncertainties.
So, scenarios became part of everybody's planning processes
in South Africa.
Soon after the Mont Fleur scenarios,
trade unions, the NUM, COSATU
were using it in their organisations.
But what it allowed the government to do
and the people of South Africa,
was to think about the future from the same premise.
All that Shell wanted to say
was that we have a tool...
..and the methodology that we use in scenario planning
can be used anywhere in the world.
I think it has been used
by a number of companies
for complex issues
where you need to find the language
to talk about things.
So, what Shell started once upon a time
has spun off a whole industry.
You have given us...
..a picture, a story about the future world
that is highly relevant for our thinking about the OECD.
The standard of living is rising
in the developing world
and with that,
the demand for energy will grow, as well.
So if there's one word to describe the future of energy,
it's "bright" but complex.
Preparing for different futures does not require
upfront investment right away.
It requires intellectual preparation.
I think what the scenarios do is
to make you realise that there would be many unexpected developments.
One that's obvious today is the fact
that all over the world
we're having Shell developments for both oil and for natural gas,
which have changed the structure
of oil and energy developments worldwide.
I think that it's essential that we keep looking for oil and gas
and, luckily, in the US, we've found oil and gas unexpectedly.
When I say "unexpectedly,"
even then the most interesting scenarios,
10 or 15 years ago,
we weren't thinking of the ways we've developed oil and gas since.
We are dealing so often
with unknowledge and unforeknowledge.
So with that clear idea
that we don't know the future,
we can't just forecast.
We can't create a model or turn a handle.
I think scenario planning
is perhaps the most important analytical tool we have,
and Shell is and has been the most important innovator
in that process.