The sustainability and responsiveness of a business strategy has a strong correlation to the quality of environmental scanning. Factual and academic details on the process of environmental scanning are discussed in my previous post “Drawing strategic value from environmental scanning and analysis”
Why the resistance to scanning?
When a new strategy is being developed it has neither shape nor form. As such the team members soon get fatigued collecting information and data in the absence a definite objective. People may start working at cross-purpose. The team is under pressure and inter-personal conflicts and low morale prevails. People get impatient more when the strategy is to implemented soon after.
Leadership and vision revisited
Amazing leadership
(Picture courtesy Tundra swans from tundra swanparadise.com)
It is here that the CEO’s or project leader’s strategic leadership come into play. He drives and leads the scanning effort with enthusiasm and vigor. A tempo of excitement must be created so that the team interest remains high. A true vision inspires and energizes the team and provides a direction to the scanning effort. It is the shared vision that generates synergy.
Analyze the data
Scanning by itself may not be enough to make sense. The information has to be analyzed in the context of the strategic objectives which may still be in the nascent stages. Good indexing and referencing is important to draw value out of the vast data. Use of statistical techniques is useful to enhance the value of sample surveys. The way to avoid information overload is by canalizing the scanning effort towards the critical success factors (CSFs). This was discussed in the previous post.
Use strategic models and creative processes
Various tools such as PEST analysis, Porters Five Forces model, and value chain analysis may be used for analysis. Brain storm to generate ideas – even outlandish ones must be welcomed. Cross fertilization of ideas will then enable creation of great strategies that are unique and have distinctive competitive advantage.
Conclusion
This article highlights the importance of a vision, leadership and team spirit in the environmental scanning process. The scanning capabilities must be imaginatively structured into the organization so that the strategy remains dynamic and responsive to the changes in the environment.
Your comments and questions are always welcome!
October 30, 2009 at 3:12 pm |
I agree, Scanning helps to understand the context of an organisations preferred future – where to go. Thus, leadership becomes critical here, since the leader would have identify, think and understand the present and the future environment for their organisation. The big challenge in my opinion here would be to understand that “We can not solve problems by using the same kind of thinking we used when we created them” (anonymous), thus a use of different approach would be required. I believe good qualities of a leader here should be open minded, curious, systematic thinker, one who appreciates suggestions from every one but is yet care full on information overload and finally he must be an out of the box thinker.
Sir I am not trying to exaggerate here I believe you have most of these qualities.
Regards
Ashish Mahto
October 31, 2009 at 10:30 am |
Hey Ashish,
I like your spirited response. The essence of learning is in discussion and expressing one’s views.
Way to go!
Thanks,
Dilip
October 31, 2009 at 10:25 am |
I wish to share with all my blog friends some awesome responses received for the above post in LinkedIn. These are global insights coming from experts who wish to share their knowledge and experience. The diversity of views highlight the importance and challenge of environmental scanning to strategy. So lets all learn, participate and enjoy.
1.
Raghuram Natesan
Program Manager at Cognizant Technology Solutions
Dear Dilip:
Most of us look at the outside from our perspective i.e. our experiences. If we want to scan the environment around us, we need to shed our beliefs and look at the outside in a totally open manner without any predispositions. I believe that this is where most of the organizations fail.
One thought in terms of enhancing the output of business environment scanning is that it might provide a greater view if the organizations inlcude in their environmental scanning not just businesses in their area of focus, but also include related businesses (those that provide upstream/ downstream services).
Regards
Raghu
2.
Don Ortner
President and Chief Solutions Officer at Q-Leadership
Motivation is rarely lacking at top corporate levels — so I think you can eliminate that as a factor. I might add that most executives in my experience are reasonably intelligent individuals. So stupidity normally plays no roll.
Commonly, executives assume that they already have a thorough understanding of their business. In general, there was a time when this was true. With time, however, and a continuous focus on urgent priorities these executive lose perspective on changes outside their organizations. They have delegated customer visits, trade meetings, technical developments etcetera to others. They begin to make decisions based on old points of reference that have grown stale.
These executive have created a mental map of their environment. The failure to scan their environment is the result of an underlying assumption that the environment has remained the same and that their time is better spent addressing more concrete and immediate concerns.
To persuade them to re-evaluate their environment — to scan it — they need to see a specific example where the current reality has changed relative to their mental map. This requires that the presenter first understands the executives point of reference. They then can pick a specific example to demonstrate the need for a re-scan. Only then will the executive give full consideration to a systematic environmental scan.
Note: the best of us will scan continuously. Even so, the best will get bogged down on occasion in the work of the immediate crisis.
Hope this helps.
Don
Clarification added:
A good reference book germane to this topic is “Deep Survival” by Laurence Gonzales. He takes the reader the the process of building mental maps, what happens when the mental map does not match reality and how to successfully adjust your mental map to the new reality. He does this through the context of case studies of those who have survived very difficult situations ranging from plane crashes to falling in a crevasse.
While not specifically a business book, I find that I draw on Gonzales regularly in business environments.
Don
3.
FRANK FEATHER
—►CEO NorthStar —►Strategic Futurist ex-Banker ►Keynote Speaker
You cannot do effective environmental scanning
from inside the organization.
Of necessity, you must be an outside observer.
To have an objective view of both the internal and
external environment, executives must mentally
and intentionally step outside the organization.
Or they must hire an outsider to do the scanning
for them — and be prepared to accept the scans
presented, even if they do not match preconceived
notions.
Ajay Prakash Mishra
Lead Business Consultants
Just a thought ..what kind of business environmental scanning could have predicted the recent economic slowdown or 9/11 attack.. events which surprised almost everyone….but still I agree that understanding environment would help organisations to know at least few possible future possibilites (may be 2 or 3 in numbers) ….my bet is less on environment scanning and more on how ready is the business to handle the situations which are invsible
4.
Dwight Long
Lecturer, University of Texas at Arlington College of Business and Chairman of the Board, Resource One Credit Union
The vision of the CEO is certainly key. The firm’s mission will be shaped by external trends and a re-evaluation of internal strengths and weaknesses. Establishing resources to monitor, data-mine and accurately report on the general business environment are essential to long term survival. The elephants in the room are the potential impacts of government regulation and deficit spending which, I would argue, has the very real potential for future inflation, increased interest rates and increased taxes with a correspondingly long term impact on economic activity. How should strategic managers shape the future of their firms? What are the implications for existing products, services, human capital and long term capital investment given the diametrically opposed national views on the role of capitalism? What are the major economic implications at stake on the outcome of this controversy? How do we trend those outcomes? What of on-going demographic shifts, technology changes or emerging market trends? Is “smaller is better” a trend or a aberration? Is “live your life on a cash basis” a more likely outcome of this economic upheaval? If so, what are the implications to buying trends, savings rates, long-term personal debt trends, the strength of the dollar in domestic and international markets, etc., etc? What actions are competitor’s undertaking to reduce cost, capture additional market share or improve net profitability? The general business environment is further complicated by the uncertainty of the upcoming 2010 elections.
I would argue those companies who continue to move down the cost experience curve, retain a well trained and effective work force, possess flexible production facilities and responsive distribution channels will be best positioned to survive.
5.
Edward Kim, MD, MBA
Experienced Healthcare Leader, Teacher, and Researcher
Companies that are serious about understanding the landscape must build the capacity to take a step back from their own pre-conceptions. However, leadership is frequently prevented from doing so because of the fact that their assumptions are what got them promoted. The world may have changed, but they make decisions as if it were still 1995.
Recognizing this vulnerability, many will simply hire consultants to tell them what is going on outside the palace walls. This is insulting to the thousands of front line employees are spend all of their time in the real world. Integrating those many customer/environment-facing data points can provide unique insights to corporations willing to build this capacity.
Of course, it’s always more expedient to buy an expensive slide deck from a top 5 consultancy. At least you’ll be as misinformed as the other competitors who bought the same deck (with a different color scheme and logo)