Environmental Scanning: what it is and how to do it

Maree ConwayThinking Futures

Environmental Scanning: what it is and how to do it

Webinar

September 2014

Thinking Futures: working with people to do strategic foresight in practice

The webinarWhat is environmental scanning and why you should do it

Environmental scanning and strategy

Getting started with scanning

Back to work

What is ES?

ES is the art of systematically exploring and interpreting the external environment

to better understand the nature of trends and deep drivers of change

and their likely future impact on your organisation.

Environmental Scanning (ES) is the foundation for high

quality strategic thinking…

…that informs the development of futures

ready strategy for an organisation.

Futures ready strategy is flexible strategy that readies an organisation

to respond to the challenges of the future

Futures Ready Strategy

Acting proactively not reactively

Focusing on exploration not prediction

Making wise decisions not ‘bet the farm’ gambles

Why a scanning system?

Strengthen the quality of the thinking that goes into your strategy development

Deepen thinking to create long term context for today’s decision making

Integrates past, present and future

Why a scanning system?

Identify strategic implications for your organisation – both opportunities and challenges

Give you enough time to prepare and be proactive (not react via crisis management), and manage potential risks ahead of time

To give you a competitive edge – seeing opportunities before they hit mainstream

Scanning and Strategy Development

Current strategy processes tend to focus on the plan as the major outcome, rather

than a shared understanding of your organisation’s

preferred future to inform action today.

Think tomorrow is going to be more of today

Aren’t prepared to cope with the unexpected or unfamiliar

Usually don’t explore the long term future (10-20 years out)

Prefer quantitative over qualitative information

Don’t challenge assumptions

Downplay or dismiss staff beliefs, hopes and fears about the future

Focus on data at the expense of strategic thinking

Something’s missingTraditional planning approaches are increasingly irrelevant

View the plan as the end game

What we have

Current strategy processes live in the pragmatic futures realm.

Working within the existing paradigm, making it better, but not challenging it.

We call it ‘strategic planning’.

What we need

Moving into the progressive futures realm

Challenge the current paradigm and re-interpret how we do business to meet the challenges of the future

New planning – people focused, collaborative, futures ready

Moving from pragmatic to progressive approaches requires a strong focus on building a high quality strategic thinking capacity in your organisation

Planning vs Strategy

Planning is not strategy

Planning = todayStrategy = future

Not just a matter of semantics – language matters

Strategic planning approaches want this

Futures ready approaches accept this

SeeingIdentifying and understanding

change

DoingImplementing and aligning

ThinkingInterpreting implications

and deciding on options

SeeingIdentifying and understanding

change

DoingImplementing and aligning

ThinkingInterpreting

implications and deciding on

options

Getting started

BIGOrganisation

DEEP

LONG

BIG

Take a big picture, systems perspective…our micro-decisions coalesce to create global futures

DEEP

Our assumptions encase us in the past

We all have blind spots that cause us to miss important information

Blindspots AKA cognitive biasesConfirmation biasSeek people & sites who agree with us; discount opposing views to counter discomfort

In group biasOverestimate capacity of our groups at expense of those we don’t know

Gambler’s fallacyPut too much weight on previous events as predictors of future events

Post purchase rationalisationConvincing yourself a crappy decision was a great idea all along – avoiding discomforrt

Neglecting probabilityAssumptions about peril and risk (eg risk of dying in planes and cars)

Observational selection biasSuddenly seeing things we didn’t see before (eg pregnant women, your new car)

Status-Quo biasMaking choices to ensure things stay the same, or change as little as possible; change will make things worse

Negativity biasWe pay more attention to bad news – we think it’s more important or profound

Bandwagon effectGoing with the flow of the crowdGroupthink, hive mentality

Projection biasAssuming everyone thinks just like me – and so they agree with me

Current Moment biasWe have a hard time imaging ourselves in the future and alter thinking/behaviour accordingly – comfort now, pain later

Anchoring biasCompare and contrast a limited number of items (why we need to scan big, deep and long)http://io9.com/5974468/the-most-common-cognitive-biases-that-prevent-you-from-being-rational

LONG

Today FutureTIME

UNCERTAINTY

Linear Future

Low

High

The linear future is the one we believe to be true, usually based on untested assumptions

Usual Planning Timeframe(3-5 years)

Trend

Today FutureTIME

UNCERTAINTY

Linear Future

Low

High

Possible Futures

Usual Planning Timeframe(3-5 years)

Trend

Today FutureTIME

UNCERTAINTY

Linear Future

Low

High

Possible Futures

Usual Planning Timeframe(3-5 years)

Trend

Getting started

Why are you scanning? What is your purpose?

First, define your purpose

What are you going to do with the output?

Where does scanning ‘fit’ in your strategy cycle?

Scanning is not a solitary activity…

Adapted from K. van der Heijden

IndustryEnvironment

Social Environment

Suppliers

Clients

Competitors

Organisation

Driving Forces

Driving Forces

Factors / Trends Issues / ForcesSocialTechnologicalEconomicEcologicalPolitical…

Customers

Members of Wider Society

Context: the external environment

Global Drivers of Change

Industry Trends

Your organisation

Strategic scanning happens at the global level – what are the forces shaping the change you are seeing in your industry?

You know a lot about this – it is the change already here that you deal with every day.

Context: a framework for understanding what you are seeing

Things happening

Trends

Change Forces

Things Happening

Trend(grouping of events)

Change Forces(moves trends in certain directions,

broad in scope and long term in nature)

Trend(grouping of events)

Change Forces(moves trends in certain directions, broad

in scope and long term in nature)

When you start scanning, you will find lots of things happening

Things Happening

Trend(grouping of events)

Change Forces(moves trends in certain directions, broad

in scope and long term in nature)

Gradually, you will be able to group similar ‘hits’ into broader categories – trends.

Things Happening

But it might still feel like this – a bit of a maze to try and work your way through…

Trend(grouping of events)

Change Forces(moves trends in certain directions, broad

in scope and long term in nature)

What we are really interested in exploring is what is shaping these trends.

Things Happening

And this is where the connections between the trends will surface and it will start to make sense

Where to look?

Emerging Issues

Trends

Mainstream

Time

Number of cases; degree of public awareness

Scientists, artists, radicals, mystics

Newspapers, magazines, websites, journals, blogs

Government Institutions

Few cases, local focus

Global, multiple dispersed cases, trends and megatrends

Adapted from the work of Graham Molitor and Wendy Schultz, and Everett Rogers

InnovatorsEarly adopters

Late Adopters

Late Majority

Laggards

Today

Time from emerging issue to mainstream varies between 18-36 years

Most scanning takes place here

Emerging Issues

Trends

Mainstream

Time

Number of cases; degree of public awareness

Scientists, artists, radicals, mystics

Newspapers, magazines, websites, journals,blogs

Government Institutions

Few cases, local focus

Global, multiple dispersed cases, trends and megatrends

Adapted from the work of Graham Molitor and Wendy Schultz, and Everett Rogers

InnovatorsEarly adopters

Late Adopters

Late Majority

Laggards

Today

Time from emerging issue to mainstream varies between 18-36 years

But we need to look on the fringe as well

Don’t dismiss the outliers…

Where to look…Newspapers, twitter, websites, blogs, wikis, podcasts, videos, news sites, newsletter, magazines, books, book reviews, presentations, reports, surveys, interviews, seminars, chat rooms, trend observers, advertisers, philosophers, sociologists, management gurus, consultants, researchers, experts, universities.

Shaping Tomorrow

Some Scanning Sites

Shaping Tomorrow Trendwatching Now and Next Strategic Business Insights Arlington Institute

Looking for…

What is happening today with your issue?

What are other people saying about its evolution over time? How credible are they?

Is it relevant to your strategic decision/issue?

Ideally, a scan hit identifies an emerging issue that is objectively new even to experts, confirms or is confirmed by additional scan hits, and that has been identified in time for social dialogue, impact assessment, and policy formation.

Wendy Schultz Infinite Futures

As you scan…

What are the major driving forces?What big surprises are on the horizon?What are possible discontinuities (wildcards)?What are the sources of inspiration and hope?

Richard Slaughter, Foresight International

As you scan…

If you think …‘that’s rubbish’, stop.First, ask why do I think it’s rubbish?Second, take another look.Third, ask what would enable you to accept it as possible? Scan to see if that is happening.

rends

Emerging Issues

The weird and unimaginable

Whatever takes you away from conventional thinking…

Classifying hits

Social

Technology

Economics

Environment

Politics

Values

VERGE Framework

A way to frame and explore changes in the world

Focused not on type of change (eg technological/social) but on point of impact across people and human systems

Developed by Richard Lum and Michelle Bowman in 2004

VERGE FrameworkDefine: The concepts, ideas, paradigms used to define ourselves and the world around us. Examples: worldview, philosophy, archetypes, religion, social values

Relate: The social structures and relationships which define people and organizations. Examples: family and lifestyle groups, government, demographics, habitat and ecosystem, education

Connect: The processes and technologies through which we create goods and services. Example: manufacturing, work force, biotechnology, wealth, engineering

Create: The technologies that connect people, places, and things. Example: information technology, transportation, language, media, visual arts, space

Consume: The way in which we acquire and use the goods and services we create. Examples: consumer preferences, modes of exchange, marketing, retail practices

When is a hit useful?

Does the hit help you to:

understand your issue better? identify a new way of seeing the issue? explore (rather than just accept) trends and their

potential impacts? identify and assess possible future threats and

opportunities, including radical alternatives? challenge existing assumptions underpinning

current polices and practice?

Shaping Tomorrow

Ultimately…

You need to trust your intuition

Your expertise, knowledge and insight is the best gauge of usefulness.

But, remember your blind spots!

Recording and Sharing Hits

What to record

Title Summary Source and date published Initial assessment of implications Tag/VSTEEP/VERGE category

http://www.thinkingfutures.shapingtomorrow.com

Reporting Your Findings

A snapshot report of the external environment.

A background paper for the strategic planning cycle.

Regular trend reports on single trends. More detailed quarterly reports on

implications of trends and drivers. Quick snippets about what you are finding. Rating the hits – staff involvement.

In all cases, add in trigger questions to prompt discussion/conversation.

What impact might it have on your industry today and in the future?

What might be the implications for your organisation?

How might you respond?

How, and in what ways, could this information be relevant to my organisation?

Reports

Back to Work

Challenge: Info overload

Challenge: stretching your thinking

Challenge: Finding the Time

Individual Scanning

Unconscious

Implicit

Solitary

Organisational Scanning

Conscious

Explicit

Collective

The aim of scanning work is to provide robust information that strengthens your understanding of your organisation’s long term context… …to enable you to make wise strategic decisions today.

We do scanning to avoid having this perspective on the future…

Enjoy your

scanning!

Download Building Strategic Futures Guides

Getting Started with Futures Environmental Scanning: what it is and how to do it Strategic Thinking: what it is and how to do it

http://thinkingfutures.net/resources/building-strategic-futures-guides

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Get in touchMaree Conway | Thinking FuturesPO Box 2118, Hotham Hill, 3051Australia

Telephone: +61 (0) 3 9016 9506Mobile: +61 (0) 425 770 181

Email: maree.conway@thinkingfutures.net

Web: http://thinkingfutures.net

Twitter: @mareeconway