End2End Innovation Management begins by asking the fundamental question Where to Play. Answering this question relies on several congruent activities and internal capabilities that primarily fall within the discipline of foresight and strategy.
Organizations equipped with strong foresight capabilities can align their strategy with future scenarios and build resilience in an increasingly uncertain and competitive landscape.
Essential for foresight and strategy is an organization’s capacity to scan its business environment. Environmental Scanning helps make sense of the various factors that have relevance and impact in this environment. It focuses on activities that enhance innovation intelligence, thereby enabling the identification of new opportunities for growth, informing strategic priorities, and shaping future goals.
- What Is Environmental Scanning
- The Fundamentals of Environmental Scanning
- Four Steps to Enhance your Environmental Scanning Capabilities:
- Conducting Systematic Scouting and Scanning.
- Making Sense of Data through Analysis.
- Gain Consensus through Collaborative and Strategic Alignment.
- Continuously Engaging in Environmental Scanning.
1. What Is Environmental Scanning?
Environmental Scanning is the capability to scan the (business) environment comprehensively and continuously.
The business environment comprises internal and external drivers of change, including capabilities, trends, disruptive and emerging technologies, startups, competitors, markets, business models, risks, regulations, and customer needs.
Common terminology that Environmental Scanning practitioners will encounter includes:
An approach that follows a specific purpose, looking at an identified topic areas in order to discover further topics, technologies, trends that seem relevant for the organization.
Scouting is usually a (semi) directed, and not a continuous task with the goal to dig deeper into the topic of interest. Scouting will be a recurring event for different innovation initiatives.
|Weak signal||A weak signal represents the first sign of discontinuity or change, often with unclear origin and meaning.|
|Trend||As an expression of new consumer attitudes, expectations, or behaviors, trends present consumer and market shifts that drive new change. Trends are an indication of market PULL; guiding innovators in knowing what consumers need, desire, and occasionally demand.|
|Emerging Technology||The development of new, emerging, and evolving technologies are designed either in response to needs or as a precursor to nascent demands. Emerging Technologies represent a market PUSH; driven by R&D and innovation, these are the tools capable of meeting—and sometimes, creating—new needs, desires, and demands.|
|Inspiration||An inspiration is evidence of how organizations or individuals are responding to a trend or emerging technology in the real world. Inspirations serve as springboards for ideation, helping innovators look beyond their immediate environment to connect information in new ways, and nurture fresh thinking.|
|STEEP||STEEP—social, technological, economic, environmental, and political—is a framework for segmenting the corporate environment to facilitate scanning and analysis. It indicates where an observed change is occurring.|
2. The Fundamentals of Environmental Scanning
Getting started with environmental scanning requires a clear framework for managing the flow of information. Foresight managers must first understand their organization’s current scanning capabilities and define the key objectives. This will help establish the scope of environmental scanning activities and search fields. Primary activities include trend and emerging technology scouting, capability supervision, and competitor monitoring.
The information and insights collected during these activities are only as good as the sources from which they are derived. A rigorous methodology should balance tangible scientific, technological, and social data insights while also recognizing the significance of the intangible, value-driven changes in society.
Valuable sources of data and information can be found across four quadrants—from analytic to visionary and from interactive & intuitive to evidence & expertise.
A common challenge that organizations face in environmental scanning is mitigating the “noise” to find and act on relevant information. Internal, collaborative evaluation of trends, technologies, and other drivers of change can serve as a means of discerning relevance and help teams understand what these influencers might mean for their business. Based on unique industry- and company-specific criteria, internal evaluation also helps empower teams with the consensus needed to ensure strategic alignment, strengthen buy-in, and act decisively.
Defining the team and responsibilities upfront ensures that the right competencies and areas of expertise are leveraged. An environmental scanning team consists of the following roles:
- Scout: actively searches for and tracks relevant signals
- Foresight Manager: establishes the process and is responsible for the outcomes
- Expert: evaluates the drivers of change according to defined criteria
- Analyst: monitors the evolution of signals to trends, technologies, and other drivers of change, and eventually to opportunities
Teams can optimize their environmental scanning capabilities through centralization and automation:
Firstly, having a central platform to collect intelligence can reveal connections between
Related drivers of change, and allow for the sharing of information between team members and business units. A single point of truth helps to create a shared understanding, fosters discussions about the importance of factors, and facilitates internal evaluation.
Secondly, using machine intelligence to automate steps within this process means that millions of signals can be scanned from available sources. This can help identify hidden patterns that provide actionable insights and areas of opportunity when combined with analyst knowledge and experience.
3. Four Steps to Enhance your Environmental Scanning Capabilities:
Conducting Systematic Scouting and Scanning
Innovation team capabilities need to be clearly defined and understood so that gaps and opportunities for increased output can be augmented with digital tools, machine learning, and AI. The sheer volume of raw data that needs to be collected can easily become problematic. Subsequently, filtering information to display what is most relevant and important is another crucial step. A common assumption would be that these steps become easier when innovation teams grow; however, more team members do not necessarily mean that the scouting and scanning capabilities are enhanced.
Identifying a wide variety of sources from where scouting and scanning information can be garnered is essential for ensuring a complete view. This 360-degree view often uses the STEEP (or its variants PESTEL, STEP, PESTLE, or PEST) analysis methodologies to organize environmental scanning. Scouting and scanning processes should enable both a birds-eye and fish-eye view of the environment, providing an overview as well as indicating focus areas.
This requires the environmental scanning process to follow an approach where a birds-eye view is taken first, and then through structured steps, views become more partial as connections start to become evident. Connections and relations between weak signals guide the sense-making process, and systems and tools need to be positioned to support this process.
🎓 ITONICS helps innovation architects discover, collect and evaluate emerging trends and technologies in one central location.
The automatic discovery of weak signals from a wide variety of sources globally speeds up the scanning and scouting processes significantly and assists teams in the systematic organization and evaluation of Elements during the sense-making process.
Making Sense of Data through Analysis
While thorough and structured scouting is a necessary first step, subsequent sense-making steps are crucial to creating valuable and actionable insights for the organization.
Teams need to inquire which factors, directly and indirectly, impact the organization, and internal and external factors should be taken into account. Degrees of impact are crucial to map out as internal factors will determine capacity and strategic planning, and external factors of influence use trend and technology insights that indicate opportunity spaces.
The sense-making process requires human and machine interlinkages, as well as scientific and intuitive activities. Having the ability to quickly view the numbers of data points, relations, and current impact is imperative for quick responses. However, leveraging human capital will help ensure a deeper understanding of opportunities and threats.
Gain Consensus through Collaborative and Strategic Alignment
Asking questions around what changing environments, behaviors, expectations, and mindsets are and how they will influence the future helps us identify opportunity spaces and threats. Organizations want to leverage opportunities and turn threats into opportunities to gain a competitive advantage.
Input from across the organization is paramount to firstly, enable the identification of opportunity spaces, and secondly, to shape strategic response. In addition, robust insights from the sense-making process may also require input and collaboration from experts outside the organization. Systems and tools that support collaboration and involve the right people at the right moments, can significantly expedite and organize efforts.
🎓 The ITONICS rate and review functionalities provide easy ways to garner collaborative input and visualize the input in ways that immediately provide insights.
Continuously Engaging in Environmental Scanning
Environmental Scanning serves as an early warning system that helps organizations adapt quickly and effectively. As opposed to project-based scanning, continuous scanning can only be sustainably implemented when efficient systems and tools can optimize the processes. To respond to rapid changes, organizations must be able to harness environmental scanning and translate insights into strategy, and planning, and implementation.
💡 Pro-Tip: ITONICS Web Clipper and Inspirator Add-Ons enable continuous and easy ways for all your employees to capture what they deem relevant for organizational innovation. Continuous collecting, scanning, and monitoring can provide a wider scouting and scanning lens and encourage awareness to actively participate in the innovation journey.