Environmental scanning is a critical component of risk management, providing organizations with a comprehensive understanding of their internal and external environments to identify potential risks and opportunities. This article explores the steps involved in conducting an environmental scan, drawing upon insights from various sources, including the Canada School of Public Service, LinkedIn, and SHRM.
Key Facts
- Identify the purpose and scope of the scan: Determine why you are conducting the scan and what areas you want to focus on. This will help you narrow down the categories of information that could affect your objectives.
- Gather data from various sources: Collect both primary and secondary data from internal and external sources. Primary data can be obtained through surveys, interviews, focus groups, or observations within your organization or from stakeholders. Secondary data can be obtained from reports, publications, websites, or databases.
- Analyze the data: Review and analyze the collected data to identify trends, patterns, and potential risks or opportunities. Look for information related to political, economic, socio-cultural, technological, legal, and environmental factors in the external environment. Also, consider financial management, human resources, information technology, governance, business processes, and organizational culture in the internal environment.
- Summarize the findings: Create a summary of the information you have gathered, including relevant facts, trends, and potential risks or opportunities. Include links to the sources for credibility and future reference.
- Conduct a gap analysis: Review the information collected to determine if there are any gaps in your understanding. Assess whether the information provides a good basis for identifying risks, if any important information categories were missed, and if enough information is available regarding the most important potential sources of risk.
- Use the results: Utilize the information obtained from the environmental scan in various ways, such as providing context to stakeholders, identifying risk drivers, contributing to SWOT analysis, informing strategy development, or sharing the scan with other areas that might benefit.
Define the Purpose and Scope
The first step in conducting an environmental scan is to clearly define its purpose and scope. This involves identifying the specific objectives of the scan and determining the areas or domains that will be covered. The purpose and scope should be aligned with the organization’s strategic goals and risk management framework.
Gather Data from Diverse Sources
To obtain a comprehensive view of the environment, organizations should gather data from a variety of sources, both primary and secondary, and from both internal and external perspectives. Primary data can be collected through surveys, interviews, focus groups, or observations within the organization or from stakeholders. Secondary data can be obtained from reports, publications, websites, or databases.
Analyze the Data
Once the data has been gathered, it should be analyzed to identify trends, patterns, and potential risks or opportunities. This involves reviewing and interpreting the data to extract meaningful insights. Organizations should consider factors such as political, economic, socio-cultural, technological, legal, and environmental factors in the external environment. Additionally, they should examine financial management, human resources, information technology, governance, business processes, and organizational culture in the internal environment.
Summarize the Findings
The next step is to summarize the findings of the environmental scan. This involves creating a concise report or presentation that highlights the key information, including relevant facts, trends, and potential risks or opportunities. The summary should be well-organized and easy to understand, and it should include links to the sources for credibility and future reference.
Conduct a Gap Analysis
To ensure that the environmental scan is comprehensive and thorough, organizations should conduct a gap analysis. This involves reviewing the information collected to determine if there are any gaps in their understanding. The gap analysis should assess whether the information provides a good basis for identifying risks, if any important information categories were missed, and if enough information is available regarding the most important potential sources of risk.
Utilize the Results
The information obtained from the environmental scan can be used in various ways to inform decision-making and risk management. Organizations can use the results to provide context to stakeholders, identify risk drivers, contribute to SWOT analysis, inform strategy development, or share the scan with other areas that might benefit.
Conclusion
By following these steps and utilizing the resources provided, organizations can conduct comprehensive environmental scans that provide valuable insights into their internal and external environments. This information can be used to identify potential risks and opportunities, develop effective risk management strategies, and make informed decisions that support the achievement of organizational objectives.
References:
- Risk Management Essentials: How to Conduct an Environmental Scan (TRN2-J09) – CSPS (https://www.csps-efpc.gc.ca/tools/jobaids/risk-management-essentials/risk-management-eng.aspx)
- How to Conduct a Comprehensive Environmental Scan (https://www.linkedin.com/advice/0/what-some-best-practices-tools-conducting-4c)
- What are the basics of environmental scanning as part of the strategic planning process? (https://www.shrm.org/topics-tools/tools/hr-answers/basics-environmental-scanning-part-strategic-planning-process)
FAQs
What is the purpose of an environmental scan?
An environmental scan is conducted to gather information about the internal and external factors that can impact an organization’s performance, opportunities, and challenges. It helps identify strengths, weaknesses, opportunities, and threats (SWOT) and understand trends, issues, and stakeholders that shape the operating environment.
What are the key steps involved in conducting an environmental scan?
The key steps in conducting an environmental scan typically include defining the purpose and scope, gathering data from various sources, analyzing the data, summarizing the findings, conducting a gap analysis, and utilizing the results to inform decision-making.
What types of data should be collected during an environmental scan?
Both primary and secondary data should be collected during an environmental scan. Primary data can be obtained through surveys, interviews, focus groups, or observations, while secondary data can be gathered from reports, publications, websites, or databases.
How can an environmental scan help an organization identify potential risks and opportunities?
An environmental scan can help an organization identify potential risks and opportunities by providing insights into trends, issues, and changes in the internal and external environment. By analyzing this information, organizations can anticipate future challenges and opportunities and develop strategies to address them.
What are some common methods for analyzing data during an environmental scan?
Common methods for analyzing data during an environmental scan include SWOT analysis, PESTEL analysis, Porter’s five forces analysis, stakeholder analysis, scenario planning, and benchmarking. These methods help categorize and synthesize data into meaningful and relevant information.
How can the results of an environmental scan be used to inform decision-making?
The results of an environmental scan can be used to inform decision-making in various ways. Organizations can use the information to identify strategic priorities, allocate resources effectively, develop new products or services, enter new markets, or adjust their marketing and communication strategies.
How often should an environmental scan be conducted?
The frequency of environmental scans can vary depending on the organization and the industry it operates in. However, it is generally recommended to conduct environmental scans regularly, such as annually or semi-annually, to ensure that the organization has up-to-date information about its environment.
Who should be involved in conducting an environmental scan?
Involving a diverse team of individuals with different perspectives and expertise can contribute to a more comprehensive and effective environmental scan. This may include representatives from various departments, such as marketing, finance, operations, and human resources, as well as external stakeholders, such as customers, suppliers, and industry experts.