Nobody can see into the future, but everyone wants to be ready for it. When your business involves multibillion-dollar investments in assets that may operate for decades, it pays to think hard about what the coming years might bring. For European energy giant Royal Dutch Shell, that involves deliberately challenging long-held assumptions and conventional wisdom.
Part of Shell's strategic planning process involves the development of detailed scenarios exploring the different ways energy supply and demand could evolve around the world. It's something the company has been doing since the 1970s and, for the last 14 of those years, the man in charge of energy scenario development has been Wim Thomas, the company's Chief Energy Advisor. To understand the organization's rationale, he explains, it's first necessary to recognize the difference between scenario planning and conventional forecasts or market outlooks. "A forecast is very much one person's view of the world. It will therefore have a certain limited perspective. By contrast, a scenario is a much more inclusive process. We take many more people's views into account, we recognize that people interpret signals differently, from different cultural perspectives and vantage points, and we don't dismiss those interpretations as long as they are logical and plausible.