The dramatic financial effects of these changes led at least one organization, royal dutch shell, to implement scenario planning. Generating insights by creating a small set of scenarios for an organizations future environment that are. Summary three decades of scenario planning in shell. Over the last three decades, shell has developed global scenarios to cast light on the context in which the. In 2005 peter cornelius, then shell s chief economist, and two coauthors had a paper published covering three decades of scenario planning in shell. When scenario planning has worked well, it has proved enormously useful to a wide range of organizations as a tool for making decisions under uncertainty. A scenario is a story that describes a possible future. That was at a time when a lot of the western oil companies. Three decades of scenario planning in shell harvard case study solution and hbr and hbs case analysis. No, thats one of two planning scenarios for three to four decades from now, developed by royal dutch shell group, the worlds most profitable oil. Three decades of scenario planning in shell international. This enabled the companys rise to becoming one of the strongest players of the international oil industry. World population is set to increase 40 percent by 2050. Shell has been using scenario planning for 40 years to help deepen its strategic thinking.
Three decades of scenario planning in shell peter cornelius. It identifies some significant events, the main actors and their motivations, and it conveys how the world functions. In many scenario planning projects, creating a more flexible and more open learning environment is a major objective of the. Heres a quick overview of the drivers and the two scenarios shell developed in its shell energy scenarios to 2025 report. In the early years, the shell team developed sets of six or seven scenarios. In the 1990s, the company started publishing and sharing its scenarios. Three decades of scenario planning in shell harvard. Given that most investments are irreversible, scenario planning can be combined with real options analysis to help identify options in the future. The first great scenario event at shell had been a 1972 report to the managing directors anticipating the impending energy crisis.
While the approach has a long history, it burst into the news in 1973. How do you develop and use scenarios for workforce planning. In 1972, scenario planning was extended to central offices and certain large shell national operating companies. When we plan for the future, we need to try to build a comprehensive.
Three decades of scenario planning in shell california. Reecting this fundamental insight, scenario planning in shell has been subject to important changes over the last three decades, not just in terms of the focus of the global scenarios, but also with regard to the underlying approach and how scenarios are incorporated into the strategic planning process exhibit 2. Major changes in the business environment can make all the investment strategies obsolete. Three decades of scenario planning in shell hbr store. Romani 2005, focuses on the external environment in which companies operate. Such an understanding reveals the potential for unexpected scale and pace in the shift of defense spending from the united states and its treaty allies 1 1. Peter cornelius is the group chief economist of royal dutch shell and a professor at vlerick leuven gent management school. Three decades of scenario planning in shell sage journals.
Peter cornelius is the group chief economist of royal dutch shell and a professor at. How shell applies the energy scenarios impacting strategic decisions 19asp 2012 conference presentation scenario planning at shell. Nevertheless, the interviewer might bear in mind three areas. In order to anticipate such shifts, the royal dutch shell group of companies uses scenario analysis, a method it pioneered three decades ago. In the following, we focus on five key steps to scenario based workforce planning. Major shifts in the business environment can complete investment strategies obsolete. Early in october 2002, i visited shell centre in london for an answer. Instead, we offer something more modest and practical.
We have been developing scenarios within shell for almost 50 years. Advantages and disadvantages of scenario approaches 223 analysis 1987 and 1995 in france, garrett 1966 in the usa and robertson 1983 in the uk ratcliffe, 1999. As a result, the planners reduced the number to three, which managers could handle easily but could no longer so easily justify the selection of only one. Recently, scenario planning has enjoyed a revival, apparent in the boom.
Shell energy scenarios to 2050 shell global shell global. The very finest part is that three decades of scenario planning in shell case study solution is really uncomplicated and basic to utilize. Officially, i was there to attend a commemorative celebration of 30 years of scenario planning at shell. Romani 2005, three decades of scenario planning in shell this paper of peter cornelius cornelius, p.
Three decades of scenario planning in shell harvard case. Clear stories contd 18asp 2012 conference presentation scenario planning at shell oil rubenstein, baer 512012 19. Scenario planning is a widely used strategic planning tool. Plotting your scenarios jay ogilvy and peter schwartz. Doodling is a kind of three decades of scenario planning in shell case study analysis because its generally not purposely focused writing. Three decades of scenario planning in shell request pdf. Over the last three decades, shell has developed global scenarios to cast light on the context in which the group operates, to identify emerging challenges and to foster adaptability to change. By the mid1970s three scenarios were common, but that tempted managers to choose a middle way as a best guess. Three years ago, we made public our shell energy scenarios to 2050.
In the 1960s, general electric and royal dutch shell introduced scenario techniques in their corporate planning procedures and in the 1970s scenarios achieved prominence in speculations about the future of society, the economy and the environment. Building, creatively, on 30 years of shell global scenarios. Developing scenarios involves taking a wealth of information about the past and present, identifying patterns, and structuring coherent stories about the future. Scenario planning templates scenario planning examples. A new approach to scenarios emphasising continuity and. Scenarios and real options scenarios and real options. Scenario planning, also called scenario thinking or scenario analysis, is a strategic planning method that some organizations use to make flexible longterm plans. In the following year, it was finally recommended throughout the group and upm was. Scenario planning allows organizations to explore the world in which they operate. Scenario planning framework and success factors ross dawson. To be an effective planning tool, scenarios should be written in the form of absorbing.
To anticipate such changes, used the royal dutch shell group of companies scenario analysis, a method it pioneered three decades ago. Over the next 40 years, shell has continued to develop a rigorous and innovative method of scenario planning. Strategy, scenarios, and the global shift in defense power. Scenario plotswe call them scenario logicscan be effectively developed during a twoday workshop, which preferably takes place at an offsite location. Advantages and disadvantages of scenario approaches for. This exercise demonstrates the essence and value of scenario planning and enables students to experience the process of planning in volatile environments. Scenario planning a tool for navigating strategic risk. Request pdf three decades of scenario planning in shell major shifts in the business environment can make whole investment strategies obsolete. For more information on shells energy scenarios see. Three decades of scenario planning in shell case solution, three decades of scenario planning in shell case analysis, three decades of scenario planning in shell case study solution, major changes in the business environment can make all the investment strategies obsolete. The thesis is about scenario planning which was an unknown method for me.
The scenario approach to possible futures for oil and natural. In 2012, we have our 40th anniversary of scenarios in shell. Pierre wack, one of the founders of shell scenario planning, observed. Overcoming obstacles to effective scenario planning mckinsey. Three decades of scenario planning in shell hbr store harvard. Since most investments are irreversible, scenario planning can be combined with real options analysis to identify options in the future, help time the decision to exercise a real option. Shell started, more than three decades ago, by building half a dozen or more scenarios but found that the outcome was that their managers selected just one of these to concentrate on.
Likewise, the words we, us and our are also used to refer to subsidiaries in general or to those who work for them. After reading the three books about scenario planning scenario planning. In 1965, a time when quantitative, computerdriven planning was very much in vogue, royal dutch shell started experimenting with a different way of looking into the future. Major shifts in the business environment can make whole investment strategies obsolete. Strategic foresight and scenario planning for the future why scenarios world is complex political, economic, social, technological, ecological future is uncertain critical uncertainties weak signals forecasts are wrong predetermined elements structure given, only variables are changing possibility vs probability space scenarios are needed global, specific. Scenarios are a means to an end and not the end itself. Following a period in which scenario development was an episodic activity, shell fully integrated scenarios into their strategic planning cycle in the early 1980s. Shell uses scenarios to develop business strategies, to identify investment opportunities and to prepare for. First popularized by shell in the early 1970s, the approach should be a natural complement to other ways of developing strategyespecially when executives are as concerned about geopolitical dynamics as many are today.
Shell scenarios in the 1990s helped people examine and explore different faces of tina. Qualitative planning techniques, such as scenario planning, can help organizations go beyond merely extending trends based on past quantitative data. In this website shell, shell group and royal dutch shell are sometimes used for convenience where references are made to royal dutch shell plc and its subsidiaries in general. The art and the practice of scenario planning draw on many different disciplines. Developing and applying scenarios is part of an ongoing process in shell that encourages decisionmakers to explore the features, uncertainties, and boundaries of the future landscape. Dec 18, 20 historical contribution of scenarios to shell activities three hard truths and shift from west to east 2007 co2 as a business 2006 security and trust 2005 networks and challenges to tina 2001 business models 1998 tina and people policies 199598 power 19891994 and renewables 1994 market liberalisation and globalisation 1992. Consequently, a major issue that needs to be addressed is how to organize the literature along precise lines. Three scenarios for planning in april 2018, 40 companies that represent about 80% of all plastics packaging in uk supermarkets formed the uk plastics pact, aiming to make all plastic packaging either reusable, recyclable or compostable by 2025. Implementing strategy,strategy,strategy management, scenario planning,strategic analysis item. Scenarios written during this decade explored, among other topics, the. These scenarios bring out the impact of critical differences in the pace and shape of political, regulatory and.
In 2005 peter cornelius, then shells chief economist, and two coauthors had a paper published covering three decades of scenario planning in shell. Three decades of scenario planning in shell case solution. Scenario planning model report amazon web services. Developing and applying scenarios is part of an ongoing process in shell that encourages decisionmakers to explore the features, uncertainties, and boundaries of the future landscape, and engage with alternative points of view. The sheer breadth and depth of perspective gained from our scenarios continues to inspire many successful partnerships and initiatives around the world, on individual country levels as well as regional and global.
Shell energy scenarios shell longterm energy scenarios to. What can we learn from scenario planning at shell oil. Paper prepared for the 24th iaee conference, washington d. Given that most investments are irreversible, scenario planning can be. It is used by organizations as a tool to visualize possible future events and conditions that may affect them and take precautionary measures to control the impact. In the 1970s, many energy companies were surprised by both environmentalism and the opec cartel, and thereby lost billions of dollars of revenue by misinvestment. Many of the best scenario practitioners have idiosyncratic backgrounds and eclectic interests. Nov 20, 20 the transformative scenario planning process that was invented at mont fleur originated in the adaptive scenario planning process that had been invented at shell two decades earlierbut it turns this adaptive process on its head. To anticipate such changes, royal dutch shell group of companies is using scenario analysis, a method for its first three decades ago. Sorry, we are unable to provide the full text but you may find it at the following locations. To anticipate such shifts, the royal dutch shell group of companies uses scenario analysis, a method it pioneered three decades ago. It is also referred to as scenario analysis and scenario thinking. Three prime characteristics are identified as setting the scenario approach apart from more traditional planning tools. The scenario approach to possible futures for oil and.
Below are summaries of the key points in the overview page. The three key driving forces are 1 stepchange in energy use, 2 supply will struggle to keep pace, and 3 environmental stresses are increasing. Apr 03, 2018 the relevance of shell s sky energy scenario. An exceptional content it can always operate in drive optimum traffic to your site leading to growth in organisation in 2018. In addition to perceiving richer options, however, we must also have the courage and vision to act on them. To anticipate such changes, royal dutch shell group of compani. They help us to make crucial choices in uncertain times as we grapple with tough energy and environmental issues. It is in large part an adaptation and generalization of classic methods used by military intelligence the original method was that a group of analysts would generate simulation games for policy makers. However, few of these narratives really reflect what actually occurred in the decade 19711981.
Scenarios, as a prime technique for future studies, have long been used by government planners, corporate managers and military analysts as powerful tools to aid in decision making in the face of uncertainty. Advantages and disadvantages of scenario approaches 221 speak for itself in terms of its purpose. Three decades of scenario planning in shell case study. Three decades of scenario planning in shell case solution and. For example, pierre wack, one of the founders of shell scenario planning in the early 1970s, credited a wide range of influences. Pierre wack, one of the founders of shell scenario planning, observed almost 20 years. Nov 29, 2015 strategic control and he still is a promoter of shell s scenario planning.