August 9, 2016 by Speakers' Spotlight
Taking the Long View Keeps Shell Nimble
Captain David Marquet imagines a work place where everyone engages and contributes their full intellectual capacity, a place where people are healthier and happier because they have more control over their work–a place where everyone is a leader. In the post below, Marquet shares his thoughts on how Shell is continuing to succeed:
A corporate culture that gives authority to people, creates leaders and welcomes dissenting opinions helps spur innovation. It also helps to take a long view.
The world is pivoting to renewable energy and less carbon-intensive fuels faster than most fossil fuel producers could have expected. Shell has adapted. Today it considers itself more of a natural gas company than an oil company. While the producer is taking a risk by betting less on crude and more on gas, rather than renewables, it stands to benefit greatly as gas overtakes coal as a primary source of electricity and in the event that fuel markets eventually rebound. And given the global push away from carbon-intensive fuels, Shell may be better positioned than its rivals who have yet to react to a growing aversion to carbon-intensive fuels.
“Shell prides itself on taking a longer and more clear-eyed view of the future than its rivals,” Bloomberg reports. “In the 1970s it began drafting ‘Shell Scenarios,’ detailed analyses of global politics and economics, and their implications for energy demand. It’s been less hesitant than competitors such as ExxonMobil—the only private oil company that’s larger—to acknowledge the need to cut carbon emissions and invest in greener energy as a hedge. This year it created a unit for renewables, and Van Beurden in June told investors that Shell ‘strongly supports’ global agreements to limit climate change.”
Planning into the future helps us envision obstacles and the consequences of ignoring these obstacles. Ignoring potential conflicts, like rising concern about climate change, can make you ill prepared to address them should they arise. Think of it as crisis management planning. Often when a crisis or conflict takes us by surprise, it is reflexive for leadership to revert to “command and control,” but crises have a tendency to reduce clarity and competence. Assign your people the task now, to look forward and develop strategies to address potential scenarios your company may face in the future. Give them authority to present these strategies if the scenario does eventually come to fruition.
In 1997, Peter Schwartz wrote a book called “The Art of the Long View: Planning for the Future in an Uncertain World” he decries a growing tendency to take short-term views more seriously than long-term outlooks. “Thinking through [scenario] stories, and talking in depth about their implications, brings each person’s unspoken assumptions about the future to the surface. Scenarios are thus the most powerful vehicles I know for challenging our ‘mental models’ about the world and lifting the ‘blinders’ that limit our creativity and resourcefulness,” Schwartz wrote.