Follow these tips to bolster your strategic planning process while spotting trends, opportunities and risks.
Horizon scanning, also known as environmental scanning, enables organizations to spot trends and prepare for emerging changes or threats that will shape their futures. Follow these five tips to strengthen your strategic planning process.
1. Link your scan to the strategy. Focus your research on areas most likely to derail your plans. This tends to produce more relevant and productive discussions. Too often, research teams are relegated to building massive reports that no one fully absorbs because there’s no strategic focal point. The more specificity that exists in your articulation of the strategy, the easier it is for the rest of your organization to anchor to it.
2. Use multiple frameworks. Each framework you use will force you to think differently and to analyze problems from more perspectives. A simple example: Doing a strengths/weaknesses/opportunities/threats analysis gives you a simple but useful perspective on your business today. However, if you first build a cone of uncertainty (a term often used in project management to describe how project unknowns decrease over time) and complete a Porter’s five forces analysis, it creates a clearer collective image of what is ahead and what that could mean to your business.
3. Look for outlier data. Bias has a profound effect on our interpretation of data—and we all tend to look for information that supports what we believe. The job of senior leaders is to position facts in specific ways. However, recognize that this can cause teams to ignore data that doesn’t support the story you’re working to communicate. Make sure that you don’t dismiss data that conflict because they present a critical opportunity to eliminate strategic risk that others are ignoring or hiding.
4. Build your culture around blunt honesty. When finding the next barrier is celebrated, people will find the next barrier. And the opposite is true as well. This is linked to point 3.
5. Make your strategic assumption explicit. One of the most powerful strategic exercises is to establish a list of the assumptions on which you’ve built your plan. Just like with financials, the assumptions are one of the most important parts of a plan because they explain what underpins your choices and allow it to be questioned and improved. While it’s not often talked about, the validity of your underlying assumptions is always in flux. In many cases, if a single assumption changes, so will your risks and opportunities.
The methods we use to scan for future risks and opportunities are very important. But nothing is more important than your strategic agility, which is your capacity to change and execute. So don’t just focus on the process; also focus on how effective your organization is at executing in terms of leadership, pace, culture, engagement and outcomes.
Kirk Leverington MBA, CMC, is a Denver-based business strategy consultant.