‘Just give me the number’
We tend to make the assumption that when considering an investment opportunity, executives seek to fully understand its financial attractiveness. Likewise, we expect that politicians would […]
The Big Five for Global Scenarios
According to Pierre Wack, the founding father of scenario planning at Shell, the essence of scenario development is to identify the (uncertain) underlying fundamental driving forces that […]
Blending ERM and Scenario Planning
Enterprise Risk Management aims to address risks that might affect the enterprise at large. The process steps involve risk identification, assessment and prioritization as well […]
DA and RM: Join Forces?
In the context of growing a business, but also for just running it, decision making and dealing with risk are core ingredients. In support of both dimensions more or […]
Risk and discount rate: an unhappy marriage
Since I left my former employer Shell in 2015 I have become exposed to opportunity evaluation practices elsewhere in business. I found that everywhere the same discussion […]
Understanding project risk using DeltaLogN
The best approach for taking into account risks when economically evaluating investment opportunities is the application of probabilistic valuation. This is a more disciplined methodology than just ‘running some sensitivities’. […]
BP, Shell and Statoil scenario practices
The default number of scenarios that are typically presented by various organizations using scenario planning is four. This stems from the application of the so called deductive […]
An innovation for decision tree probabilities
The attraction of a decision tree is that it brings together conceptual thinking about a decision problem and the quantitative evaluation of it. […]
The Shell scenarios of the 90s and what came of it
I am a big fan of look backs and after action reviews. Only in that way can we learn, reflect on how we looked at opportunities, what we were thinking at the time and whether the decisions taken made sense in the context of what we knew or could […]
Scenarios, numbers and the lognormal
However interesting and generally appealing scenario thinking, as discussed in my previous article, may be, it only provides a broad, qualitative picture of the context within […]
Scenario planning and the so what question
When developing a strategy or making investment decisions, there will be many uncertainties that need assessment. These can range from cost and timing issues to broader questions at the macro level, […]
Uncertainty and the art of decision making
For the development or continuity of a business lots of investment decisions are required. Making the right choices is key for the future success of the organization. […]