Seeing the World

In 1988 I left PG&E and took a job in the strategic planning department of Royal Dutch/ Shell, the giant Dutch-British energy and chemicals company: almost 100 years old, $100 billion in sales, and over 100,000 employees in more than 100 countries ; the fourth largest industrial company in the world. The global petroleum business was much different from the California utility business. Shell was not concerned with regulatory hearings; it was dealing with the hurly-burly of the marketplace . It was wonderfully cosmopolitan, intellectual, and practical: a combination of British subtlety and Dutch bluntness. If Shell staff were arrogant , I thought, it was because they deserved to be: they were the best. Here I could learn how the world really worked.

My job was to come up with new ideas that would provoke, stretch, and challenge the managers' thinking about tough business problemsto improve the quality of their strategic debates. From the window of my office in the London headquarters, I could see the Houses of Parliament. Like Parliament, Shell believed in the value of debate to hammer out a sound way forward. And like "Her Majesty's Loyal Opposition," our department had to ask the difficult and awkward questions that would challenge the managers and improve the quality of their thinking.

Our primary tool for this challenging was scenarios. Our leader was Dutchman Kees van der Heijden, a rigorously thoughtful man who had worked with Pierre Wack, the philosophical Frenchman who had invented this approach in the early 1970s. Shell could neither predict nor control the future of its business environment, and it was therefore impossible for us to compute one right strategy for the company. Instead, the company's managers needed to be alert to what was happening and what might happen in the world, so that they could quickly recognize meaningful changes and adapt to them. Our scenarios were a set of carefully constructed , plausible stories about how the future might unfold over the next twenty years.

Wack's methodology was sophisticated and expansive. He called the first phase of the work " breathing in." We observed the world, as broadly and carefully as we could, looking for underlying trends. We had wide- ranging interests: the future of the nation state, environmental science, automobile technology, social values, Middle East economics, the politics of international trade. I found this a wonderful intellectual adventure and an amazing education. We read books and journals, commissioned and wrote research papers, and organized expert seminars .

The most important way we learned about the world was to go out and talk with people. We had a blank check to go anywhere and meet anyone who could help us see the trends more clearly. The purpose of these meetings was not only to learn what was going on but also how different people thought about it. I talked with civil servants in the UK and Belgium, businessmen in Singapore and Brazil, environmentalists in Kenya and Germany, journalists in Thailand and India, academicians in China and Czechoslovakia, politicians in Korea and Nigeria, engineers in Japan and the United States.

After two years of breathing in, we were ready to breathe out. We spent months arguing about the significance of what we had seen and how it added up. I enjoyed these debates and played to win. Eventually we selected two scenarios that effectively and elegantly synthesized what we had learned about what might happen in the company's business environment. Then we wrote these scenarios up in the form of plausible, logical, quantified stories. The management decisions of Shell were never included in the stories: we assumed that the company's actions had no impact on the scenarios.

Next, we flew around the world, with our thick deck of view-graphs, to run workshops for every management team in the company. We challenged each team to study the two scenarios and consider what each, were it to occur, would mean for their business. What specific opportunities and threats would arise in their markets? Which of their unit's strengths and weaknesses would be exposed? What actions would be indicated? We wanted the managers to "live in advance" and internalize these different possible futures . We did not want them to operate from a single fixed view of what they thought would or should happen. In this way, every unit in Shell adjusted its strategy so as to be more robust against both of these stories.

One of our global scenarios focused on climate change. I was proud of this work because I was concerned about environmental problems. This helped Shell managers see and recognize the importance of these issues earlier than competitors , and to take the lead in sustainable development. As far as I was concerned, Shell was doing a good job in the world. But I was now more pragmatic, even cynical . I was far beyond the na ve idealism that had brought me to Berkeley. I now knew that every trend had a countertrend, every argument had a rebuttal, and every solution produced a new problem. I knew that there was no longer one right answer. My world had become more realisticand more complex.

In 1990, van der Heijden retired from Shell. He was replaced by Joseph Jaworski, an outside hire with a markedly different background and orientation. Jaworski was a successful Texan trial lawyer and businessman who had spent the 1980s founding and building the American Leadership Forum, a nonprofit organization dedicated to strengthening collaborative civic leadership in the United States. He was innovative and curious . He was not an expert in global scenarios and did not mind admitting it. He was also intensely idealistic, which set his pragmatic colleagues, including me, on edge.

We started to develop a new set of global scenarios. After the fall of the Berlin Wall, we focused on the twin revolutions of political and economic liberalization and globalization. We constructed two new storiesnamed New Frontiers and Barricades about how the world might unfold as a result of these dynamics. New Frontiers described what happens when poor countries liberalize successfully and claim a larger role on the world stage. This opening up is turbulent and painful to many established interests in both poor and rich countries, but it continues because people believe that it is in their long- term self-interest. In Barricades, people resist globalization and liberalization because they fear they might lose what they value most: their jobs, power, autonomy, religious traditions, and cultural identities. Economic and political vested interests are deeply threatened by opening up, and they attempt to contain it.

These new scenarios raised a new set of tough business problems for Shell managers to address. And they had a significantly different twist that was elicited by Jaworski's visionary and activist orientation. He and I and a few other members of the scenario team were convinced that New Frontiers would be better for the world than Barricades, and that Shell should, in addition to preparing for both scenarios, actively promote New Frontiers.

Some people in our department thought that this would not be right. Favoring one story over another would make managers less adaptable in the face of uncertainty. Furthermore, companies should not intervene in politics; they should stick to running businesses.

I was intrigued by this debate about the appropriate role of Shell in the world. I understood the reasons for detached observation and challenge, and why Jaworski's activism did not quite fit in. Shell's business managers were responsible for creative, entrepreneurial action; our department's job was just to challenge these managers' thinking. I also understood the risks of corporate hegemony, and that many citizens would view any attempts by Shell to act outside its business role with skepticism and hostility . At the same time, the company's belief"we are just business people, we observe what is going on and try to adapt, within laws and rules that governments set"struck me as somewhat disingenuous and self-serving, even irresponsible. Shell, one of the world's largest and most powerful organizations, was in general a beneficiary of the way the world's rules had been written, and actively lobbied for its specific interests in economic, energy, and environmental rule making. I wondered whether there wasn't a different, more engaged way for the company to participate in solving complex problems.

Jaworski's passionate and idealistic activism challenged my dispassionate and realistic scientific training. He looked for evidence of the better future he intuited and hoped was possible and then acted entrepreneurially to bring this vision into reality. I admired his whole-hearted commitment and leadership. And I was surprised to discover that my own desire to make a difference, which had faded after I left Berkeley and entered the "real world," was returning.