Planning For The Unexpected

By Gerrit Van Wyk.

Scenario planning.

Scenarios are alternative stories about the future, no matter how implausible they may seem. In a way they are like a pilot practicing for unusual events in a flight simulator.

Pierre Wack, head of corporate planning for Royal Dutch Shell, noticed during the late 1960’s the oil industry was running on two assumptions; there will always be lots of oil, and, therefore, oil prices will remain low. He challenged senior management to think about what they would do if that was not the case, and when the 1973 oil shock hit, that early peek into the future catapulted Royal Dutch Shell from the eight to second biggest oil company in the world. The fall of communism in 1988 shocked the world, but not Shell, who was prepared for that scenario. And yet, the company on occasion ignore its own predictions to land itself in deep water.

In December 2019, a novel coronavirus emerged in China which rapidly spread around the world, and in March 2020 was declared a global pandemic by the World Health Organization. It was a rare event, but we had two coronavirus epidemics in 2002 and 2012 as a trial run, and the 1918 influenza pandemic ran a course, other than vaccination, in all respects eerily like what happened now, but we learned nothing.

On December 19, 2022, Vancouver was hit by a snowstorm effectively shutting down one of Canada’s biggest airports, creating a ripple effect on feeder airports like a hundred car pileup on a freeway. Another storm two days later shut down the Toronto and Montreal hubs, and air travel descended into chaos. We know here in the big white north snowstorms and delays are part of Christmas travel, yet that scenario never seems to come up in senior management planning, and the question is, why is that?

Gerrit Mes, an unknown author, published Now Men and Tomorrow Men around the same time Wack and Shell started scenario planning. He argued the mental time frame we have determines how we go about acting in the world, and that as opposed to a time frame stretching infinitely into the future in Eastern cultures, here in the West we are “now” people, based on 1 to 4 year budgeting and election cycles. We plant trees to harvest in 4 years, not a hundred. We know about pandemics and snowstorms, but ignore them until they become a crisis because they fall outside our time mindset. It is for this very same reason we can’t solve the big problems of your time such as health care, global warning, etc., despite all the warnings, and rather wait until they turn into an immediate crisis, and then go into full panic firefighting mode.

Neuroscientists tell us we evolved to deal with crises by flooding our brains with cortisol, which triggers the flight or fight reaction and narrows down our thinking. In other words, we stop thinking logically when the wheels come off. It is for this reason playing out scenarios before they happen is so valuable; it gives us time to think how we could react while we are still sane.

There is another point to scenarios, they consider big pictures, in other words ought to think in terms of systems and complexity (some use scenario planning mechanistically as if it is a tool, which defeats the objective), and many of the problems we face are big problems. During the inevitable inquiry after the snowstorm mess, airline executives pointed out the systemic nature of the failure and that to solve it requires a systemic response. Fixing health care and global warming require a similar approach.

Now we run into a second and equally big problem, not only are we incapable of future thinking in the West, we also think of problems in a mechanistic way, and, to the extent they are seen as systemic, it is of a system working like a clock or machine, as opposed to the complex entities they are.

When we are hit with pandemics and snowstorms, it’s easy to blame visible prominent players, but these are wicked problems, as Rittel and Webber call them, which are difficult to get a handle on, involves humans and their very complex interrelationships and interactions, and easy simple or piecemeal solutions are doomed to fail. The airline executives are right, to better prepare involves many more players than them, but crucially, these players must play together well to win the match. It is not enough to have them on the pitch, how they interact with each other matters a lot.

It makes sense to think of big issues as the complex problems they are, which requires involving many different perspectives, lots of conversation and dialogue, and learning our way out of it through small actions and observing the outcomes. The problem, as Dörner pointed out, in the West we also evolved to be action men and women and there are not many who can drive this different approach.

Socially, we stay with those we know and the thinking we are familiar with, which got us into the mess in the first place, and keep reproducing the same mistakes, never learning from them.

Humans evolved to cooperate for very good reasons, but Western-style thinking elevates individualism and competition to a pinnacle of virtue and not only laughs at, but destroys cooperation, other than forced. Which is why after the pandemic and the snowstorm we all sit in the boat pointing fingers at each other until the boat sinks, rather than work together at salvaging it.

It makes more sense to think about how things may play out in the future by making different assumptions about the world and how things are, which means if a rare event occurs, we have a better chance of hitting the ground running, assuming our memories last that long. It beats the crisis reactive mode we are in all the time, complaining of being stressed by our own actions. A pandemic is a rare event, which means although we cannot accurately predict when and how the next one will hit us, we have some knowledge about it and can use that to think about how we may react ahead of time if it happens again.

A black swan event is both rare and unpredictable, which means we have no information about it ahead of time, but we can think about and develop systems to respond to one, provided we acknowledge it is part of and works according to the principles of complexity. If you substitute our current locked in obsession with mechanistic thinking with assuming our reality is complex, one can play out a scenario of how we may respond to complex unpredictable events in which we are forced to learn and adapt on the go.

In short, there are ways for managing complex crisis situations which are much better than what we do currently, but as Royal Dutch Shell showed us, we can also prepare for the future, not in terms of the expected, but the unexpected. The only thing holding us back is how we think about the world and our roles in it.

I learned it’s easier to send a manned mission to Mars than changing people’s, and specifically planners and decision makers’ thinking. I accept they may not want to do so, but then they must also own up and take responsibility for their decisions, rather than the unedifying finger pointing after pandemics and snowstorms. You break it, you own it. If that doesn’t work for you, change your mind and do things differently, it’s that easy.