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I met Daniel in the fall of 2004, when Stefan Scholtes and I were assisting with a course for Shell executives at the Judge Business School at Cambridge University. We were planning to present portfolio management in the course and had sought Daniel s input. But Daniel was also working on Shell s real-life exploration portfolio as well, and invited me to help. By then several rms had developed software focused on this area (some based on the methods published by Ben Ball and me). But, as discussed earlier, enterprisewide risk models could not easily be built up out of subcomponents. Daniel had experience with some of these complex systems, which, although technically sound, had not gained traction within the decentralized decision-making structure of the rm. This time the planets were aligned. First, Shell had recently drawn its exploration investment decisions back into their headquarters at The Hague. Matthias Bichsel, then the executive vice president of Shell International Exploration and Production, describes the problem: I had the challenge of moving our dispersed and disparate exploration efforts (and exploration

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As noted in 6, the degree of model complexity employed in analysis is a key aspect of designing effective RMPs and other management science intervention processes. An interesting survey of failures and successes of quantitative methods in management by Tilanus (1985) supports the widely held view that successful modelling requires approaches that are simple , exible, easily understood, appropriate to the situation, and able to cope with low-quality data. A detailed discussion of the effectiveness of simple analysis is provided by Ward (1989), employing a constructive simplicity concept that describes the form and level of detail in a model. Chapman and Ward (2002) further develop this constructive simplicity concept and its application to various aspects of project uncertainty. Usual arguments for constructive simplicity focus on model-building considerations such as model clarity, exibility, and convenience, but constructively simple models can also provide an ef cient way of learning about decision situations. The basic idea is to start with effective, simple analysis that is then elaborated in useful directions as understanding develops. A key

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The relative weights of the two rectangles in Fig. 12.13, which in this case just means their relative areas, will determine where on the line joining their centres the joint centroid lies. Without therefore actually measuring the sides of either rectangle, how can their relative areas be represented as the ratio of two line segments

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Incident azimuth angle (deg)

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