As an oil company, how do you prepare for a future where fossil fuels will become less important? Q8 carried out that exercise for 2035 together with TomorrowLab.
We are a bit of an odd man out", says Koen Vankelst, Operations Director Q8 Northwest Europe. "In the past, you had the traditional oil companies which during the 'nineties were mainly occupied with achieving economies of scale for global projects. Now a number of these companies are downsizing. They still offering the brand and the product, but it is distributed by a reseller. New people are entering the business, with different cost structures and different ideas. Now you are in competition with many smaller parties, who do have important brands. We are still a real oil company in the traditional sense of the term." "Based on our lengthy tradition, you have a tendency to be introspective as an oil company and not take too much notice of others. Of course, that is not the right approach in a fast changing world. Today's consumer is bound forced to supply high quality products, professionally, safely and cheaply. That is what is leading to a push to change things faster in the company, but we are not organised in that way yet. Like most companies, we have a budget, a five-year plan and a plan for 2030. If you read all those plans, it is still rather traditional. We sell fuels, we try to generate as much turnover as possible, and in addition, we have a number of non-fuel activities, such as the shops and the carwash. It all remains within the contours of strengthening the existing business. With TomorrowLab, we are letting the outside world come into our business."
How robust is the strategy?
Q8 started the collaboration with TomorrowLab in September 2016. In the meantime, they have really opened our eyes, says Vankelst. "They are looking to the world of 2035, and nobody can predict the future, so nothing is linear." An important step in the project is the scenario planning exercise: putting together four worlds. These are the most extreme scenarios plotted on two axes. "One axis is about an inclusive society where everyone helps each other. On the other hand, there is a society with the happy few and a fierce battle between rich and poor." The second axis concerns climate change. On the one hand, the fact that it can be solved thanks to technology and international cooperation. On the other hand, it models the failure to achieve that cooperation, leading to rising temperatures and ultimately, total chaos. "We tested with the whole team in a workshop how robust our current strategy is in those four worlds. That was a confrontation, because we rated inadequate in three out of those four worlds. There was only one world where we scored 70%. If you have a business model that comes under that much pressure in the long term, that is awkward." "The four worlds are incredibly remote from our day to day business. In our minds, we believe that we can still supply our fuels to customers for another 15 to 20 years. However, it might happen that in six months' time, somebody invents a technology that brings about disruptive change to the whole industry. It hasn't been invented by us yet, but tomorrow it could happen and we have to be prepared for it. We must be alert that such things could overwhelm us like a wave. At present, we are still riding on the wave. We have set up all kinds of WhatsApp groups in-house: one looking at alternative fuels, another at digitalisation, a third at infrastructure. We have also put together a team that will monitor the evolution towards those four worlds. What are the signals, what changes can we observe, what do we need to change? Another team is thinking about what we want for the customer. A steering team will then challenge both teams. In that way, we will come up with a future strategy and customer vision."
How will the service station evolve?
"Electric cars are a very big issue for us. If they spread, then the petrol station has almost no future. If biofuels make a breakthrough, or hydrogen, then you need a network of places that people have to visit. It will be a big what if story. We are still counting on diesel and petrol and we are trying to develop biofuels further. We are making partnerships with competitors in order to have a broader network and have reciprocal acceptance of our fuel agency cards. The exclusive collaboration with Delhaize and Panos will be continued. E-commerce is certainly something we are looking at as well as improving the product rang for on the go. We have installed fast chargers with EDF Luminus, and by the end of this year, 18 fast-charging stations will be ready. Then we will see how that develops." After all that thinking, Koen Vankelst wanted to do something concrete for his employees. At the end of June, anyone could submit ideas and four projects were selected, for which 100,000 euro has been distributed. The first project concerns the transformation from a static petrol station to an interconnection point for mobility. The second project is a modular station, comparable with pop-ups in the towns, which can change depending on the customers' interests. The third project is expansion of the research centre in Rotterdam with a discipline for hydrogen storage. The fourth project concerns the Q8 heating oil department, and concerns the addition of new services. "Just think of boiler maintenance, insurance against a leaking tank, or order heating oil via the Internet of Things if the oil level has fallen or at the time when oil prices are cheapest." These four projects will also be carried out together with TomorrowLab, which will handle the project management. "It is a fascinating process, but it will take a lot of transformation by the company. It has certainly given us a boost, and we see that our people think it is useful."