Every successful organization knows that the key to staying ahead of the competition is to keep a pulse on the latest trends and changes in the market. That's where environmental scanning comes in. By keeping an eye on your industry's landscape, you can spot emerging opportunities, identify potential threats, and make informed decisions that shape your innovation strategy.
An innovation model should cover all aspects from strategy to execution, and the innovation blueprint should empower an organization to have a single point of truth for all their innovation activities. This allows innovation architects to clearly define goals, see which stakeholders are needed, and create a structured approach to the innovation journey.
In this article, we take a closer look at why environmental scanning is a key consideration for any organization that wants to stay one step ahead of the game. We point out how environmental scanning matters and what capabilities are needed to effectively understand - and respond to - your changing business landscape.
What is environmental scanning?
Environmental scanning is the process of gathering, analyzing, and disseminating information about an organization's business environment. This includes factors such as economic, social, technological, legal, and environmental trends, as well as competitor and market information. As a structured framework to gather, organize and create innovation intelligence, it enables informed and evidence-based strategic decision-making.
Environmental scanning is a crucial component of innovation. In the ITONICS Innovation Big Picture, it is positioned under Where to Play. The Big Picture considers three strategic areas and critical phases of innovation: Where to Play, How to Win, and What to Execute. Within this framework, each step is vital to sustainable innovation performance.
The first phase - "Where to Play," is a critical component of developing strategic foresight capabilities. By understanding emerging players in one’s field, shifts in other business environments, and competitor behavior, businesses can anticipate forces of change and determine which opportunity areas they can target most effectively.
4 reasons why environmental scanning is vital to your innovation journey
- Environmental scanning is a sense-making activity.
The scanning process helps companies capture large amounts of information and sift through the data to leave only what is relevant to their business goals. Environmental scanning helps to detect the most pertinent signals to an organization's business needs, thereby identifying actionable opportunity spaces.
- Environmental scanning helps build a solid and sustainable knowledge base.
Environmental scanning pushes companies to develop the habit of consistent landscape and situational analysis. By having all data on one central platform, information becomes transparent to other stakeholders, and decision-makers can make more accurate and data-driven decisions.
- Environmental scanning allows for more precise signals and more explicit strategic focus.
By developing a deep understanding of the impacts of the different signals, environmental scanning helps businesses determine the implications of these signals to their strategic direction. An effective environmental scan leads companies to ask questions such as “What projects should be stopped?” or “Are there any startups that we could collaborate with to drive our strategic objectives?” This clarity empowers organizations to develop innovation roadmaps that reflect external industry phenomena as well as internal capabilities.
- Environmental scanning empowers leaders to take decisive action.
Environmental scanning enables leadership to respond effectively to changes in the marketplace, leading the charge from a place of confidence instead of uncertainty. The benefits of a thorough environmental scan do not end here; having a defined picture of the future, clear strategic goals, and a well-communicated innovation roadmap can galvanize everyone from the C-Suite Executive to the intern.
How to build your environmental scanning capabilities with ITONICS
ITONICS Insights is a software tool that automates the environmental scanning process by using natural language processing (NLP) technology to scan millions of verified sources, enabling innovation teams to detect weak signals easier and quicker. Filtering and data visualization functionality support moving through large amounts of data to relevant insights and relieves innovation departments of the strenuous, time-consuming process of manual data mining. Instead, it empowers innovation practitioners to prioritize what they do best: find the magic.
Here’s a three-step approach that teams can use to augment their environmental scanning ability:
- Develop clear scanning anchors
These are the key issues that will inform your data gathering and market research process. The scanning anchors you use will ultimately inform your strategic plan and need to be clearly understood by all stakeholders participating in the strategy and foresight development process.
- Frame the work
Using analytical models such STEEP (Social, Technology, Economy, Environment, Politics) or PESTLE (Politics, Economics, Social, Technological, Legal, Environment) provides you with an ideal starting point for your scanning activities. By having a comprehensive view of the different factors that may influence your strategic operations, you can build a more realistic picture of the future.
- Harness the power of collective buy-in
Innovation teams must not work in silos. Inviting other experts from the beginning is vital to avoid missing critical perspectives or phenomena in the embryonic stage of your innovation journey.
Also see: 4 Steps For Enhancing Environmental Scanning Capabilities
Ready to radically upgrade your environmental scanning process?
With ITONICS' powerful innovation management software, you'll not only have everything you need to streamline your company's innovation processes from end-to-end, but you’ll also be equipped with the tools you need to systematically identify weak signals and new business opportunities, collaborate with team members across departments and locations, and share insights to foster transparency.
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