Environmental Forces Monitoring
Environmental forces monitoring refers to an ongoing management system, deployed through existing meeting structures, that allows the organization to create a view of the business environment with the benefit of input from subject matter experts across the organization. The purpose of maintaining this type of system is to elevate the completeness, clarity and depth of strategic awareness across the entire organization. The beauty of this type of system is that it doesn’t represent a whole new body of work, as it replaces discussions previously had with a more efficient process.
Planners understand the need for consistent alignment in organizations, in fact Dr. David Norton once referred to it as the “secret sauce of strategy management.” The question is whether it’s easy to do this when there’s no consistency in how each area within the organization understands the business environment. Aside from the incredible inefficiency of each team starting their environmental context discussions from a blank page, the risk is that their view of the environment is incomplete or inconsistent with the rest of the organization. From a change management perspective, this puts their understanding and support of the corporate direction at risk as well.
The alternative to this is to create an ongoing system through which you identify trends, events, and factors in the business environment that have the potential to impact your organizations’ ability to implement strategy. It involves the integration of planning with research and is useful in all phases of strategy management.
Because this knowledge base acts as an input to decision makers and employees across the organization but also gleans the insights from these management meetings, it evolves over time and becomes continually more insightful and accurate.
The assumption behind this approach is that no one person has a complete view of the environment, and that people tend to have a higher degree of environmental awareness in the areas where they specialize and manage. By collaborating on this view of the world, each team plays a key role in creating a highly balanced view overall. The company has an articulated view of what is important, and what it can control.
The recommended structure of the output is to identify positive/negative and internal/external factors in each of your focus areas, and a fifth dimension which is where market and macro environmental factors are managed. This provides a logical structure for capturing the data.
Once it has been populated initially, there are a number of options that present themselves. Rating positive factors for strength (how much of an advantage, and the importance of leveraging or maintaining the advantage) and negative factors for the intensity (intuitive sense of the likelihood and degree of impact) coupled with the degree of control you have to mitigate or leverage the factor creates a very clear view where your efforts are best spent.
At this point, the information starts to become more interesting. As always, the best discussions are “What does it really mean,” which results in risks and opportunities.
There are a host of other integrative opportunities where this system benefits other functions in the organization, like research. Their batting average can’t help but go up with executive once they have this type of information. Even better is to fully integrate them into the process of pushing this information into division and team planning processes and using the resulting discussion as input back into the collective view. Employee engagement models are easily constructed to provide a channel for all employees to have a voice, either through forums or online surveys.
What you can do with this knowledge once the baseline information has been established:
• Predict: Once you have a view of today, you can easily facilitate scenario planning discussions on where things will go from here and begin to develop strategy around that future environment
• Align: When the organization is aligning under the same view of the world, consistency will be greater
• Identify risk: Implemented well, this system identifies current and emerging risk factors and allows you to translate them into strategy
• Identify new opportunity: Giving opportunities the same credence as risk is an interesting step in the evolution of your management discussions
• Eliminate gaps in your environmental awareness: The structure and process makes this entirely more likely
• Identify and challenge unproductive assumptions: Identify where your organization chooses to move in a particular direction defensively, where the assumption may not be true
• Decrease the time investment required for planning: The outputs of every planning session are not lost, they go on to benefit the rest of the organization and save time