Hosts Jim Love, CIO for ITWC, and Doug Sparkes, a lecturer at the Conrad School of Entrepreneurship and Business, open this 17-minute podcast by taking the listener back in time to October 1973, when the Organization of Arab Petroleum Exporting Countries (OPEC) proclaimed an embargo on oil. Widely hailed as a Black Swan event, this ostensibly unpredictable crisis was, in fact, predicted by a major global company. Even more significant, the company had plans in place to deal with just such a fiasco.
The backstory begins when the company, Royal Dutch Shell, charged Ted Newland, a senior staff planner, and Pierre Wack, the head of planning for Shell Française, with developing long-term, future outlooks that would catch the attention of senior Shell executives. Not only did these two unconventional thinkers define the practice of scenario planning at Shell, but by predicting a situation much like the OPEC embargo, they also helped Shell to prepare for a future that defied conventional wisdom.
Seeing the potential in scenario planning and understanding the geopolitical and economic realities were critical to Newland and Wack’s success, but the real genius, says Sparkes, was inserting their scenarios into Shell’s strategic planning process and influencing corporate actions.
Despite achieving worldwide recognition in business literature and practice, the strategic planning approach developed by Wack and Newland has struggled over the years for acceptance. With massive disruptions upsetting a business environment that’s already managing monumental change, and a global pandemic thrown into the mix, scenario planning may finally have come into its own.