Part 1 – The External Environment
Unless we know where we’re at, we cannot establish a route for getting to where we want to be. It’s like saying “I want to go to Denver.” But if we’re in Washington, DC, our route and direction is very different than if we’re in San Diego. Here, we discuss the kind of data collection and analysis that needs to be undertaken by organizations on a continuous basis, to establish where they are in the world, in the marketplace, and with respect to their competition and more, as well as for providing input into the Vision-Based Planning (VBP) process. Ideally, the organization will have conducted the kinds of analyses described below. In some cases, organizations do not know what they need, so they collect too little or too much. However, before we begin a VBP project, we want to make sure that specific information we know will be required is covered somewhere. So we conduct interviews with the leadership, key stakeholders, and we also obtain information from various external sources. This information needs to be realistic and honest, not a glossed-over account, or a wish list.
Prior to undertaking a VBP project with a client, we conduct extensive interviews with the leadership, key stakeholders, and some younger members of the organization. These younger people are likely to be the future of the organization, and they have a stake in its success. They are also more technologically savvy and less bound by tradition. We always encourage the leadership to include some of their young mavericks as participants in their strategy workshops.
During the interviews, we ask people how they see the organization. What business are you really in? Could you perceive it from some other perspective? What do you think are its strengths and weaknesses? What new areas of business could you see the organization moving toward? What and who do you see as major threats? What would you like to see done differently? Since we conduct the interviews in confidence, we encourage the interviewees to be honest and open in their remarks. However, we ask that any criticism be directed at a person’s actions or words, not at the person themselves.
We also look at any analyses we can obtain from open sources, from other consultants who may have worked with, or produced reports on, that particular company or industry. We also conduct “serendipitous intelligence”—searching the internet and following our noses (aka intuition).
Although we perform this research prior to starting the VBP process, organizations should be analyzing their own operating environment and strategic context on a continuous basis. Some large organizations have a department that does this, others subscribe to various analytical services provided by outside data collection and analysis companies. In our experience, while some organizations do this very well, others have a “hit and miss” approach that can be an expensive proposition. We have seen organizations that subscribe to many data and analysis services, and commission “futures” and foresight projects, without any good way of collating and interpreting the information. The rest of this article, as well as the following one provide guidance for what needs to be collected and analyzed, and how to do it effectively.
Analyzing the Strategic Context
This is a critical part of the planning process, and it needs to be done by the organization prior to the workshops, although we will conduct a brief analysis of our own as mentioned above. This is a perfect task for a staff group or strategic planning department. This part of the analysis is often known as STEP or STEEP because of the subjects it covers: social, technological, economic—and more recently environmental—and political data. All organizations should research every area, although the detailed subjects will be those that are specifically relevant to them. What we want them to do is to develop a comprehensive picture of their operating environment—all the things that might affect their organization and its business, and that might be affected by the organization. For instance, establishing a shopping mall requires an analysis of – at minimum – the following kinds of variables:
- Area population: their demographics, values, attitudes, lifestyles, disposable income.
- Geographic and geological considerations.
- Infrastructure considerations for the mall, including transportation, water, sewage, and power.
- State and local government policies, tax rates, and incentives.
- The act of building the mall will have impact on the local area in terms of increase in land use, transportation, water and power use, the local physical environment, and more – these need to be assessed.
In preparation for the VBP, we recommend researching the following kinds of subjects:
Socio-cultural situation: What is happening that might impact the organization’s operations/business?
Changing values and attitudes of the population.
Changing attitudes toward the military, business, health and fitness, etc.
Increasing use of social media.
New forms of influence.
Economic situation: What is happening that might impact the organization’s business?
Cuts in spending (defense, transportation, etc.)
More taxation on business.
Tax advantages for research and development (R&D).
Changes in malpractice rules or legislation.
Political situation: What is happening that might impact the organization’s business?
Attitudes toward the military/defense.
Attitudes toward big business.
Changing political alliances.
Changes in legislation.
Wars and conflicts.
Changes in government-provided insurance.
Changes in international trade legislation.
Changes in government processes for acquisition approval.
Technology areas related to the business:
Technologies for network-enabled capabilities.
The Internet of Things.
New technologies for Command, Control, Communications, Computers, and Intelligence, Surveillance, and Reconnaissance (C4ISR).
New platforms and weapon systems.
New developments in energy.
New personal health monitoring systems.
Many “early warning” systems and devices for areas such as counterfeiting, technological failure, and building security.
New logistics delivery systems.
The changing nature of future challenges:
Need for speed.
Shortages of raw materials, energy.
Shortages of food and water.
And many, many more.
A word of caution is needed here – and this is a subject to be covered in a later article – before deciding on what areas to research/examine, the leadership of the organization needs to think broadly about the nature if the organization’s business, and perhaps even reframe it first. If we extrapolate from the past alone, then our analysis will be limited to the variables we have always considered, and we may miss new aspects of our future business and its environment. In fact, we always recommend taking the time to think about how we might reframe the business first. For instance, are we thinking about houses or homes? About automobiles or transportation? About curing disease or encouraging wellness? The answers to these kinds of questions will lead to entirely different research and analysis of our operating environments.