Scenario planning in Silicon Valley

Peter Schwartz predicted the future for Shell - and the movie Minority Report. Now he's working for tech company Salesforce.

by Adam Gale
Last Updated: 02 Oct 2018

There’s a famous scene in the film Minority Report, where Tom Cruise goes shopping. The store scans his retinas as he enters, and the holographic sales assistants start calling him by name, offering personalised suggestions and advertisements.

Parts of that scenario are already coming true. Down the road in central San Francisco, there’s a store, open to the public, called Standard Market that uses facial recognition technology to create a frictionless shopping experience – no cashier, no queues. Similar experiments have already been run by Amazon at its Seattle campus and Alibaba at its HQ in Huangzhou.

‘Our goal when we wrote Minority Report was that a decade from then, people would say "that’s just like in Minority Report!". They’re still saying it.' Peter Schwartz was approached to help create a plausible future setting for the film because of his long career as a corporate futurist – in the 1980s, he pioneered the use of scenario planning at oil giant Shell.

Originally a military technique, scenario planning involves creating several plausible possibilities for the future based on assessing different combinations of known and unknown variables. For each, a plan is made; the business’s long term strategy will correspond to the most likely outcome, but with contingencies for the others and the flexibility to move between them as events unfold. It’s a way both of challenging false certainties and of avoiding being paralysed by uncertainty.

‘I don’t predict,’ Schwartz is keen to point out. ‘I do multiple scenarios. It’s much easier to get the future right when you have several tries at it.’ At Shell, for example, Schwartz and his team successfully saw the end of the Soviet Union – in 1984, six years before it actually happened.

‘But we also had the other scenario where it didn’t happen. We saw an economic crisis in the USSR, and there were two ways out, a new Stalinism or the greening of Russia. It was close. My point is, you’re trying to explore the possibility. My test of success is not getting the future right, it’s do we make better decisions.’

This is the essence of scenario planning. The whole process, when done well, is designed to disconnect a company from the received wisdom about trends, which often tend to assume the future will be like the immediate past.

Schwartz now works as senior vice president for strategic planning at the rapidly growing US software-as-a-service firm Salesforce where, he admits, the scenarios look rather different. ‘When I was at Shell, I was thinking 30, 40, even 50 years ahead. In the high tech industry, the time frame is radically shorter, but it doesn’t mean the uncertainty is less. I think of it as a radically changing landscape you’re trying to navigate. You want to make sure you see the features of that landscape before they come out of the fog.’

A glimpse into the future

So what does Schwartz see coming out of the fog next? Fortunately, the Minority Report futurist doesn’t anticipate the rise of a Terminator-style artificial general intelligence – ‘that’s just bad science fiction’ – but he has high expectations of more mundane machine learning.

‘It’s highly consequential, very useful and it’s here and now. The example I like to use is a truck driver. Everyone’s worried they’ll lose their jobs – they won’t. First of all, we’ll need more truck driving in the Amazon world, but the truck driver of tomorrow won’t be like the truck driver of today,’ Schwartz explains.

The future of truck drivers can already be seen in US Air Force drones. These fly on autopilot until they get close to their mission, when a pilot behind a computer screen half way across the world takes over. ‘The driver of tomorrow will do the hard part, getting the truck through the streets of London to the M4, then taking it over again when it gets to Bristol. They’ll be driving not one but five trucks. It’s hyper productive, automated when best for automation, then using human skills in the city.’

Another continuing trend is the rising importance of the personal data economy. The idea that data is the oil of the 21st century may sound daunting to previously analogue businesses, given who’ll be their competition (‘Amazon is the Saudi Arabia of data’), but there are big opportunities here too.

Data doesn’t always have to be big, for a start. The most important data in many cases are the kind that support people, rather than train AI. Schwarz points to US retailer Target as one of the best examples of breaking the boundaries between digital and physical.

‘My wife was checking out and a salesperson asked if she had the Target app. She said no, and he offered her 10% off the bill to put it on her phone. Next time she comes back, the app asks her what she’s looking for, and when she arrives there’s a human being there to greet her and show her where the BBQ tools are.’

The trick for anyone to survive in a rapidly changing, uncertain future, says Schwartz, who left his own business to join Salesforce at 65 years old, nearly a decade ago – is always to keep learning. It’s a quality he sees, fortunately, in today’s business leaders. ‘Every CEO I know is hungry to know more stuff. It’s ruthless curiosity about their industry, the competition and the world around them.’

The ones that aren’t are unlikely to see the coming changes, whatever they may be, until it’s too late.

Management Today spoke to Peter Schwartz at Dreamforce, Salesforce's annual conference.

Image credit:Youflavio/Flickr (creative commons)

 

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