THE SHIELD OF ACHILLES (119 page)

—Shell International Petroleum Company, 1992

I
WILL NOW
take up the question of how the society of market-states might respond to the challenges just surveyed. But rather than prescribe a single set of solutions to these challenges, I will describe alternative approaches, whole worldviews that, if they govern action, will bring into being radically different worlds. I choose this approach for four reasons: first, because simple forecasting—on which a prescriptive analysis must be based—is inadequate at a time when fundamental change in the consti-tutional order of states is occurring; second, my method can be used independently by readers whose values and preferences may not coincide with mine; third, this sort of presentation can clarify the moral choices we must make in the coming decades—having to do with what kind of world we want to live in and what we are willing to do to achieve it—rather than submerge those choices in the seductive calculus of efficiency; fourth, the implementation of the choices that are ultimately made will have less to do, in a market-state environment, with codified proscriptions and more to do with shared understandings, goals, and expectations.

Imagine unexpected, gravely unsettling events that happen to the world in the next few years: suppose an asteroid struck the Earth, setting in motion changes in the atmospheric climate; suppose a continental crisis in the groundwater table appeared, caused by saline-freshwater mixing zones that spread across numerous states; suppose a state embarked on a radical program of mass eugenics using genetic engineering on its own population; suppose infectious diseases appeared on a pandemic scale that could not be vaccinated against or eradicated, but that could be successfully treated by very expensive drugs; suppose a civil war broke out within a
single state, leading to the use by one of the parties of biological weapons; suppose earthquakes triggered a deep worldwide economic depression.

Is the General Assembly of the United Nations the place to address the problems that would arise as consequence of these events? If not, is the U.N. Security Council endowed by the rest of the world with the political and moral authority to cope with these shattering events? Can we assume that the United States, or any other single power, could solve them alone? As we faced the year 2000 computer problem, who actually believed that the U.N. or NATO or the Council of Europe or the OAS was the institution that could solve it? This simple thought experiment shows how far we have already come from the society of nation-states and its constitution toward the society of market-states. Nor do I believe that international law—at least insofar as it may be invoked to prohibit state acts like tampering with the human genome, for example, or the use of biological weapons—is the resource we would turn to for resolution, nor that the International Court of Justice is the place we would go.

In the election of 1992, George Bush was taxed with lacking, as he himself put it, “the vision thing”—a vision of the future toward which he proposed to lead the nation with his policies. This was obviously not something Ronald Reagan had lacked, nor Jimmy Carter and certainly not Lyndon Johnson. All had clearly definable views of the future state of the union that they wished to bring about. Yet those writing speeches for George Bush and the senior officials of his administration were to a large degree the same persons who had done those jobs for President Reagan. What had changed was not simply the personality of the president:
everything
had changed, although things looked pretty much the same.

Before the sea change from nation-state to market-state, “vision” was simply a matter of looking ahead, extrapolating from the present. Realizing that vision was a matter of strategic planning. President Clinton's health care proposals would have fit into President Truman's Fair Deal; President Bush's START II treaty was a continuation of President Reagan's arms-control agenda. Suddenly in the 1990s, no one really had a “vision” of the future because the future was going to be so unlike the past. What was required was not lacerating self-criticism over our failures to foresee the collapse of the Soviet Union, the Gulf War, the disintegration of Yugoslavia, and the mass migrations in East Africa. Rather we needed to approach the future with an acceptance that simple forecasting was not going to be useful to us for a while, that no one had any clear view of what was coming and therefore no one could be confident that he or she was offering a realistic vision of the future. Instead we had to sharpen our skills at imagining different futures so that we had some idea of what was at stake when the choices the future presented were actually upon us.

To say this is to contrast “strategic planning” with “scenario planning.” Both rely on intelligence estimates that are based on the careful analysis of immense amounts of information, sorting out the true from the false, assigning probabilities to information that might be either true or false, guessing what the future would be like if all the relevant facts were available to the analyst.
¹
The problem for estimative intelligence in the current environment is that it depends upon a relatively stable world from which to extrapolate. No one has grasped this better than Joseph Nye, the former head of the National Intelligence Council at the CIA, who wrote:

This is precisely the problem, and Nye's recommendation—the construction of alternative scenarios rather than single-point predictions in order not so much to predict the future as to help policy makers think about the future—is precisely the solution. But scenario planning is not widely practiced in governments, as opposed to corporations, and it is easily confused with strategic planning.

Scenario planning relies on the creation of hypothetical, alternative stories about the future that share certain factual assumptions but differ based on decisions made within each scenario; strategic planning is a formalized procedure that aims to produce an integrated system of decisions based on predetermined goals. That is, strategic planning assumes an answer to the question that scenario planning poses: what sort of future do we want? The time horizon for scenario planning is typically from five to more than twenty-five years; strategic plans usually go no further out than one to three years. Inputs to scenario planning are more qualitative, that is, they share certain factual estimates about the future but emphasize economic, technological, resource, and cultural trends. Inputs to strategic planning tend to be more quantitative, looking to past performance, forecasts, and probabilities. Thus scenario planning exploits uncertainties, allowing the creation of alternative futures; strategic planning attempts to minimize uncertainty. The results of scenario planning are multiple alternative outcomes versus the quantified single outcome based on the likeliest scenario that is the setting for strategic planning.
³

The difficulty with implementing Nye's proposed solution is that such scenario construction depends upon a dialogue with decision makers at many levels in order to create a culture that is sensitive to the implications of change and alert to opportunities to create favorable conditions for change. Members of this culture produce the raw material on which scenarios are based; intensive briefings with them, once the scenarios are written, are as important to the process as the written product. But the National Intelligence Council cannot spend the time with the president and the senior members of his National Security Council, nor is it willing to disclose its estimates to the many hundreds of other less senior officials who, together, could bring such a culture into being. High-impact but low-probability contingencies, which are crucial to the imaginative dialogue of the scenario process, are of little interest to busy politicians. Competing scenarios, in the absence of a culture of dialogue animated by a sense of rapport with leaders at the top, are anathema to bureaucrats whose careers are risked by answering questions like “What would it take for this estimate to be dramatically wrong? What could cause a radically different out-come?” which translates to “What arguments can you give me that undermine your recommendations?”

Things are easier for the business corporation. In the early 1970s Royal Dutch Shell was regarded as the weakest of the great multinational oil companies, known as the “Seven Sisters.” At that time Shell began a series of scenario studies that are credited with assisting that corporation's remarkable rise since then. As early as 1972, one of Shell's scenarios envisaged the formation of OPEC and the sudden rise in oil prices that hit the world in the winter of 1973 – 74; and a subsequent scenario correctly described the equally dramatic drop in oil prices that began in early 1986. In 1984, a Shell scenario (called “The Greening of Russia”) described the possible breakup of the Soviet Union and the ensuing chaotic conditions in Eastern Europe. But to depict these descriptions, which turned out to be accurate, as validating the scenario process is to misunderstand its significance completely. After all, if a corporation is doing more than one “estimate,” it will often be able to predict a rise (or fall) that turns out to be true. What the scenario process did was to make some futures appear less plausible that had more or less been taken for granted, and to prepare managers to look for signs of likewise unexpected futures. In the absence of this preparation, managers are inclined to shoehorn events into their settled expectations or to ignore altogether outlying facts.

Since Shell's highly publicized success with scenario planning in the
1970s and 1980s, many corporations have attempted to employ this tool with the hope of achieving similar dramatic results. The Corporate Executive Board reports, however, that there has been some disillusion with the scenario-planning process. “Perhaps the single greatest driver of this dissatisfaction,” the Board has concluded, “is a widely held yet misguided expectation that scenario planning readily and directly improves strategic decision making; misconceptions rooted in scenario planning's history promote this expectation…”
⁴
The problem is that Shell's successes are inevitably laid to having correctly predicted the future, rather than having enabled its decision makers to cope better with that future as it, unpredictably, unfolded. Prepared by their
alternative
scenarios, Shell executives were able to see a pattern in events—a story—that their competitors experienced as mere noise, a chaotic departure from conventional expectations.

Instead of simply relying on forecasts, the Shell Group does its planning for the future through a complex process of consultation, the drafting of alternative decision scenarios, and a thorough debriefing process around the world with its managers. The object is to use scenario planning as a means of stimulating institutional learning; what is being learned is a way of assimilating new events through the incorporation in (or the destruction of) the ostensive, simple stories of the scenarios. However sophisticated the tools, if there is no significant effect on exposing assumptions and heightening the focus on values, people will quickly fall back into the old habit of asking, “Tell me what will happen.”
⁵

The managers of every corporation operate according to conventional expectations, usually unarticulated and seldom fully tested against alternatives. The scenario process externalizes these stories, tests them against known facts, and then uses them to provide a basis for further reaction by managers as events fit (or don't fit) the story. Following extensive interviews with fifty or so top managers at the Shell Group and with a large network of academic, political, business, and cultural figures around the globe, a team synthesizes the information drawn from these conversations into two or more competing scenarios. Thus about every three years a book of these scenarios—global, regional, country, and topical—is produced, and extensive briefings are done on its basis.
⁶
According to Shell, the most important aspect of this process is that “[b]y considering alternative futures, we begin to see that the future is shaped not only by the past but by what we think is possible and by the choices we make.”
⁷
Let us apply this analytical process to the problem of meeting the challenges to the society of market-states described in the preceding chapter.