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SHELL VS BP: HBR VIEW CREATES STIR

Could the Gulf disaster have been prevented by thinking differently?
Dateline: 12 July 2011

An article in this month’s Harvard Business Review, primarily focusing on BP’s arch-competitor Shell, contains lightly-veiled criticism of BP’s thinking in the years before the Gulf blowout.

The article, written by two US academics, covers Shell’s use of scenario planning from the 1970s to the present day. During the oil crises 40 years ago, executive management’s dedication to “rehearsing future scenarios, no matter how unlikely or unthinkable” gave Shell a dramatic competitive advantage when the oil price shocks hit.

This question is raised towards the end of the article: “What if the BP executive teams had spent a similar amount of time evaluating the possible negative impacts of their extreme new exploration in the deep waters of the Gulf?”

While the question goes unanswered in the article, reporters have been flooding BP executives to get their response.

On CNN last night, Larry King ran a damning series of interviews asking why executives spend so little time exploring the implications of the future, rather than focusing on short-term profit and “enrichment.”

These were his closing comments: “Surely, if you had done this, one of the scenarios that would have been explored would have been the implications of a massive blowout at that depth. Surely, that would have prompted significant investment in preventive measures before going ahead with production? While delays and a hit on profits would have been a result – the whole Gulf disaster might have been prevented. Surely, at only a fraction of the human and financial cost actually incurred?”

In the light of the unprecedented volatility in BP stock prices, pressure is increasing in financial circles to find a measure of auditing a company’s future prospects. Certainly investors and venture capitalists would welcome that.

Louis Geeringh’s quote in today’s Financial Times seems to sum it up well: “In this warp-speed world, past performance is no indicator of future resilience or success.”

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Warning: Hazardous Thinking at Work

Despite appearances to the contrary, Futureworld cannot and does not predict the future. Our Mindbullets scenarios are fictitious and designed purely to explore possible futures, challenge and stimulate strategic thinking. Use these at your own risk. Any reference to actual people, entities or events is entirely allegorical. Copyright Futureworld International Limited. Reproduction or distribution permitted only with recognition of Copyright and the inclusion of this disclaimer. © Public domain image.

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