Published by Dr. Ken – PhD
In 2022, Shell faced mounting pressure from rising energy costs, supply chain disruptions, and an urgent need to transition toward cleaner energy. For Ben van Beurden, Shell’s CEO at the time, navigating this complex landscape required more than experience or instinct. It demanded precision—powered by AI.
Van Beurden believed that good decisions, like good design, are about clarity and simplicity. Inspired by Donald A. Norman’s The Design of Everyday Things, which emphasizes intuitive problem-solving through design, he sought to apply the same principles to Shell’s decision-making processes. “AI,” he said, “should reduce complexity, not add to it.”
The Maze of Complexity
Shell’s energy operations are a labyrinth—spanning offshore drilling, refining, logistics, and renewable energy investments. Each decision, from adjusting oil production to investing in wind farms, involves countless variables: market prices, geopolitical risks, environmental impact, and customer demand.
Traditionally, these decisions required weeks of analysis by teams of experts. But the energy market moves fast, and delays meant missed opportunities or costly mistakes.
The AI Compass in Action
Van Beurden implemented Shell’s “AI Compass”—an advanced decision-support system powered by machine learning and real-time analytics. The system followed KPMG’s “So What” principle: it delivered the core insight first—immediate, clear recommendations—then provided supporting data.
Here’s how the AI Compass guided Shell’s decisions:
– Optimizing Production: AI analyzed seismic data from offshore rigs 24/7, recommending adjustments in drilling techniques. This reduced operational costs by 10% while increasing output.
– Renewable Investments: Machine learning models analyzed global energy trends, government policies, and public sentiment to pinpoint the most promising locations for wind and solar farms.
– Supply Chain Resilience: Using predictive analytics, Shell anticipated disruptions—such as port closures or political unrest—before they happened, enabling proactive adjustments that saved millions.
A Defining Decision: Norway Wind Farms
In 2023, Shell had to decide between expanding oil operations in the North Sea or investing in offshore wind farms in Norway. Conventional market analysis showed higher short-term profits from oil. However, the AI Compass, factoring in carbon pricing trends and public sentiment analytics from millions of online conversations, projected that wind investments would yield greater long-term returns and align with Shell’s sustainability goals.
Trusting the AI’s recommendation, Van Beurden chose wind. Months later, when oil prices dropped and the European Union increased carbon taxes, Shell’s decision proved prescient—both financially and reputationally.
Insight from KPMG: Presenting the ‘So What’
KPMG emphasizes that decision-making should always start with the conclusion—the “So What”—followed by supporting insights. Shell’s AI Compass embodied this principle, delivering clear, actionable recommendations backed by complex data models.
AI’s Lesson for Entrepreneurs:
Like Shell, entrepreneurs face complex decisions daily—whether about launching a product, entering a market, or hiring a key team member. The lesson is clear:
– Use AI to clarify, not complicate.
– Focus on the ‘So What’—what does the data suggest you should do?
– Let AI handle the complexity, but let human judgment guide the final call.
As Van Beurden reflected:
“Every decision you make reflects your evaluation of who you are.”
For entrepreneurs, AI can be the compass—but values and vision will always be the guide.
