Anticipation III

If there is a storm in the Himalayas, you can confidently predict that tomorrow, or the next day, there will be flooding in the Ganges plain.

Most strategic anticipation draws on the predictable "downstream" results of events that have already happened, from trends already at work, from predictable economic or social dynamics, or from the routines other agents follow that make aspects of their behavior predictable.

Some of the most striking anticipations made in any modern business were created by Pierre Wack and Ted Newland of Group Planning at Shell International.  In 1980 Wack said that "certain aspects of future events are predetermined: If there is a storm in the Himalayas, you can confidently predict that tomorrow, or the next day, there will be flooding in the Ganges plain."  The flood Wack and Newland had predicted back in 1970 was the rise of OPEC and ensuing energy crisis.  The storm creating this flood had been discerned in the pattern of incomes and populations of key oil-producing countries, In particular, Iran, Iraq, and Venezuela, all had high oil reserves, large growing populations, and ambitious development goals.  Wack and Newland predicted that such countries would be strongly motivated to seek price increases.  They saw that price increases would, in turn,  make countries such as Saudi Arabia and Kuwait realize that oil in the ground might appreciate faster than the dollars it bought once it was pumped and sold. 

ACTION POINT:  What are the storms in your industry and their likely downstream floods?