🔵 Cruising in chaos - Part 5, Pierre Wack's scenario planning
In this series of articles, which started this summer, I explore the key differences between innovation during relatively stable times and our current market. After discussing portfolio strategies, we're investigating Pierre Wack's work at Shell in the 1960s today.
1. The context
In the late 1960s, large corporations were still convinced that linear planning could master uncertainty. As usual, you would produce forecasts, scale your capacity accordingly, and reassure yourself that the occasional course correction would keep you safe.
Then the economic architecture began to crack apart: Bretton Woods collapsed, OPEC asserted itself, governments nationalized assets, and oil prices fluctuated in chaotic ways. Even worse (if even possible), in 1973, Arab countries decided to go for a global embargo on oil for countries that supported Israël during the Yom Kippur war...
The rules of the oil trading game were not just shifting; they were disappearing, and Shell, at that time still a mid-tier player, saw its carefully crafted forecasts disintegrate in real time.
Enter Pierre Wack.
At the time, a French planner with the instincts of an anthropologist arrived in Shell’s London office with a very different ambition. He was not chasing more sophisticated models; he wanted to liberate executives from the illusion of certainty and force them to view the world with fresh eyes.
Sounds familiar?
2. The big idea
Forecasting is seductive because it delivers executives a comforting illusion of control. Numbers are lined up in neat tables, the pipeline looks secure, and management convinces itself that a little steering left or right will be enough to cope with turbulence. But in chaotic times, reality doesn’t drift gently away from your Excel sheet; it fractures without warning. Prices can quadruple overnight, political regimes can implode, or technologies can wipe out entire value chains.
