Environmental scanning

Environmental scanning can be defined as ‘the study and interpretation of the political, economic, social and technological events and trends which influence a business, an industry or even a total market’.[2] The factors which need to be considered for environmental scanning are events, trends, issues and expectations of the different interest groups. A trend can be defined as an ‘environmental phenomenon that has adopted a structural character’.[ Environmental scanning is a process of collecting information to carry out a systematic analysis of the forces affecting organizations and identifying potential threats and opportunities with a view to generating future strategies. Environmental scanning systems provide early warning about important changes and detect “week signals” that indicate plans should be amended. Scanning the horizon is always prudent to identify new developments that can challenge pasta assumptions or provide new perspective to future threats or opportunities. All futurists do environmental scanning –some are more organized and systematic, all try to distinguish among what is constant, what changes, and what constantly changes. No system will be able to eliminate all uncertainty; the objective of scanning system is simple to find early indications of possible important future developments to gain as much lead time as possible. Since plans are based on forecasts and forecasts are based on assumptions about the future, scanning the horizon is always prudent to identify new developments that can challenge past assumptions or provide new perspectives to future threats or opportunities. Based on previous Millennium Project research, the following approaches should be considered: 1. Expert panels could "look out" for changes on the horizon that could be important to implement or accomplish plans; 2.Database literature reviews provide access to a broad range of information useful to policy makers, planners and strategists. 3.The Internet is a powerful tool that can be used to identify issue-related information and emerging trends. 4.Hard-copy literature reviews of selected periodicals could also to detect important incipient changes; 5.Essays by experts could explore critical long-term issues for recommendations on policy and strategy; 6.Key person tracking and conferencing monitoring Environmental scanning can be thought of as the central input to futures research. Issues Management Process Flow Diagram And Relationship With The Strategic Planning Process The following diagram illustrates how scanning, both inside and outside a nation, provides information to the strategic planning process. The diagram illustrates that this should not be a static, linear process but one that is dynamic.

The following diagram, also from Renfro, illustrates the relationship between environmental scanning and long-range planning that defines the strategic planning process:

The following diagram (reprinted from the author referenced below) will be helpful for national teams to develop their own process:

Environmental scanning and issues management are approaches to help large organizations and nations manage their future. To work, they must be embedded in a network reaching throughout the nation. The location, participation, authority, and path to effective impact are implicit in the organizational process outline above and are fully explored in Issues Management by Joseph F. Coates and the Staff of Coates & Jarratt published by Lamond, Mt. Airy, Maryland, in 1986. Summary Matrix: Issues Management Techniques and Evaluation Factors

EVALUATION FACTORS	RELEVANCE TO IM	IMPORTANCE TO IM	LABOR COST	EXPERTISE TO USE	SERVICES AVAILABLE	USE IN STARTUP	USE IN STEADY STATE	TRANSFERABILITY TO NEW USERS	UNDERSTANDABLE TO MANAGEMENT	DO-ABLE BY MANAGEMENT	VALIDITY
Techniques Networking	H	H	H	L	S	M	H L	H	H	M	H
Precursor Events Bellwethers	M	M	H	H	S	L	M	M	M	L	L-H
Media Analysis (Col. Inch Counting)	M	M	M	H	F	L	M	H	M	L	L-H
Polls/Surveys	M	M	H	H	M	L	M	H	M	L	L-H
Executive Jury	H	H	L	L	NA	H	H	H	H	H	L-H
Expert Panel	M	H	H	H	M	L	L	M	H	H	L-H
Scanning & Monitoring	H	H	M-H	M	S	H	H	H	M	L	M-H
Content Analysis	M	M	H	M	F	L	M	L	L	L	M-H
Legislative Tracking	H	M	H	M	S	L	H	L	M	L	M-H
Delphi	L	L	M	H	M	L	L	M	L	L	L-M
Conversational Delphi	H	M	M	H	S	L	L	L	H	L	H
Consensor	M	L	L	L	NA	L	L	H	M-H	H	H
Cross-Impact	H	M	L-H	H	S	M	M	M	M=H	M	M-H
Decision Support Systems	H	M	M	L-M	F	L	M	M	M-H	M	M-H
Computer Assisted Techniques	H	M	M-H	M	M	L	H	L	L-M	L	M-H
Small group Process	H	H	L	H	M	H	H	L	H	H	M-H
Scenario Building	M	M	H	H	M	L	M	L	L-H	L	L-H
Trend Extrapolation	M	H	H	H	S	M	H	L	L-H	L	L-H
Technological Forecasting	L	L	H	H	S	L	L	L	L-H	L	L-H
Decision Analysis	L	L	-	H	F	NA	NA	L	L	L	L-H
Factor Analysis	L	L	-	H	M	NA	NA	L	L	L	M-H
Sensitivity Analysis	L	L	-	H	M	NA	NA	L	L	L	M-H
Trigger Event Identification	M	M	-	H	F	L	M	L	L-H	L	L-H
Key Player Analysis	M	M	M	H	F	H	H	L	M-H	M	M-H
Correlation/Regression	L	L	-	H	M	NA	NA	L	L	L	L-H

Summary chart continued:

EVALUATION FACTORS	SCOPE OF USE IN INDUSTRY	START UP TIME	DATA BASE REQUIREMENTS	INTERPERSONAL SKILLS REQD.	USABLE IN ADVISORY FRAMEWORK	UNDERSTANDABLE TO ADVISORS	TIME HORIZON	CAPITAL COST	APPLICATION TO STRATEGIC PLANNING	USE OF COMPUTERS
Techniques Networking	M	L	L	H	H	H	0-5*	L	M	L
Precursor Events Bellwethers	M	L	H	L	M	M	0-5*	L	M-H	M
Media Analysis (Col. Inch Counting)	M	S	M	L	M	M	0-2	L	L-M	H
Polls/Surveys	M	S	M	L	M	M	0-2	L	L-H	H
Executive Jury	M	S	L	H	H	H	0-5*	L	L-H	HL
Expert Panel	S	S	L	H	H	H	0-5*	L	L-H	L
Scanning & Monitoring	S	S	M	M	M	M	0-5*	L	L-H	M-H
Content Analysis	F	L	M	L	L	L	0-5*	L	L-H	H
Legislative Tracking	M	L	H	L	L	M	0-5*	L	L-H	M-H
Delphi	F	S	L	L	H	M	0-5*	L	M-H	M-H
Conversational Delphi	F	S	L	H	H	H	0-5*	L	M-H	L
Consensor	F	S	L	H	H	H	0-5*	L	L-H	H
Cross-Impact	F	S	L-H	H	L	L	0-5*	L	M-H	L-H
Decision Support Systems	F	L	M-H	L	L	M	0-5*	M	L-H	H
Computer Assisted Techniques	M	L	M-H	L	M	M	0-5*	M-H	L-H	H
Small group Process	M	S	L	H	H	H	0-5*	L	L-H	L-M
Scenario Building	S	L	M-H	H	L-M	M	0-5*	L-H	M-H	L-H
Trend Extrapolation	M	L	M-H	M	L	M	0-5*	L	M-H	M-H
Technological Forecasting	M	L	M-H	L	L	M	0-5*	L	M-H	M-H
Decision Analysis	UNK	UNK	UNK	L	NA	M	0-5*	L	M-H	H
Factor Analysis	UNK	UNK	UNK	L	NA	M	UNK	L	M-H	H
Sensitivity Analysis	UNK	UNK	UNK	L	NA	M	UNK	L	M-H	H
Trigger Event Identification	UNK	UNK	UNK	M	M	L	0-5*	L	L	L
Key Player Analysis	UNK	UNK	UNK	M	M	L	0-5*	L	L-M	L
Correlation/Regression	UNK	UNK	UNK	L	L	M	UNK	L	M-H	HG

CODES: H High 0-2 (years) Near Term S Some, Short M Medium 2-5 (years) Mid-Term M Many L Low, Long 5-50 (years) Long-Term F Few NA No Applications UNK Unknown New awareness of the general context in looking at economic, legislative and regulatory developments. Is not to predict the future but to help managers in a situation of increased uncertainty. A key futures methodology. Involves a careful and conscious process of (1) creating a ‘scanning frame’ (or set of clear analytic priorities), (2) a scanning process, (3) a way of communicating important data and (4) evaluating the uses of this intelligence. Vital for enabling the forward view in organizations and institutions. Seen also as an input to strategic planning. But still surprisingly rare. Hence, many phenomena, threats, opportunities, seem to appear abruptly because their precursors (early signals) were ignored or missed one manifestation of the loop of futures scanning. For a company to gain or maintain a sustainable competitive advantage, it must be ever vigilant, watching for changes in the business environment. It must also be agile enough to alter its strategies and plans when the need arises. Methods There are three ways of scanning the business environment: • Ad-hoc scanning - Short term, infrequent examinations usually initiated by a crisis • Regular scanning - Studies done on a regular schedule (say, once a year) • Continuous scanning - (also called continuous learning) - continuous structured data collection and processing on a broad range of environmental factors Most commentators feel that in today's turbulent business environment the best scanning method available is continuous scanning. This allows the firm to act quickly, take advantage of opportunities before competitors do, and respond to environmental threats before significant damage is done. The Learning Organization Once information is obtained, it must be disseminated throughout the company, to all departments, and at all levels. There is resistance to this outlook because many employees feel that knowledge is power and sharing knowledge will reduce one's worth to the company. Rather, all people in the company should share in the task of scanning. When all employees scan some part of the environment, and all information, so obtained, gets disseminated throughout the organization, the company is said to be a learning organization.