|DEVELOPING A STRATEGIC PLANNING CAPABILITY||PREVIOUS | CONTENTS | NEXT|
While the link between environmental scanning and long-range planning is conceptually straightforward, using both within an organization can be complex and confusing, at least initially. This chapter addresses the issues associated with developing a strategic planning process within an existing organization, emphasizing the connection between the scanning function, forecasting/futures research methods, goal setting, implementation, and monitoring. While organizational change can be accomplished from the top down, creating a new function and/or department is often expensive, disruptive, and difficult. More often, successful organizational change is accomplished by more evolutionary processes, in which the new function and/or department grows into being over some period. The process outlined here is focused on this evolutionary growth.
|The strategic planning process creates 10 to 20 or more visions of the interesting future every year.|
An important axiom to remember is that perhaps one of the least important products of the planning process is the plans. Although an obvious overstatement, it serves to underscore the point that the planning process is an ongoing, continuously changing, organic activity. A corollary of the axiom is the perversion of the political axiom, "Plan early and often." The jokes about planned economies stem from the idea that we will today do a 10-year plan and 10 years from now will still be locked into the same plan. Properly understood, however, the strategic planning process creates 10 to 20 or more visions of the interesting future every year. No output of the planning process is ever fixed if its basic assumptions are disrupted.
In a second round of interviews, the first question changes from identifying the issues to determining how important they are and how likely they are to affect the institution. A simple probability-impact chart could be used for this question. With those issues where there is sufficient consensus, the probability and the impact are multiplied together and the weighted importance thereby determined. The consensus issues are then ranked according to their weighted importance, both positive and negative. The issues for which consensus on either probability or impact is insufficient require additional rounds of discussion and evaluation.
The second question in the process focuses on modifying the resources managers use to stay in touch with the external world. This step takes the form of a simple questionnaire that shows the resources currently scanned and focuses on what additional resources someone in the institution should be reviewing to monitor a particular issue.
The results of this process are not only the improved profile of information resources to be used in the organization and a rank-ordered list of emerging issues but also a growing familiarity within the organization of the concept of environmental scanning. While most organizations resist change imposed on them to some degree, they are less likely to resist-or may even seek-change resulting from their own initiative. The evolutionary, open process of consulting the major decision makers within the institution that systematically produces understandable qualitative and quantitative results provides a most successful way of introducing the idea of environmental scanning in the organization.
The substantive results of the issues evaluation-that is, a rank-ordered list of important emerging issues-provide the basis for the planning assumptions of the external environment for the forecasting stage in the internal perspective. This stage in the process is where the two perspectives first intercept. A simple procedure for evaluating the interaction of these external events on the internal forecasting is an impact chart with the various trends being forecasted for the internal perspective on the vertical axis and the various emerging issues on the horizontal axis. This matrix can be incorporated in a Delphi questionnaire for evaluation by the panel of respondents used in the preceding steps. The question at this point is, on a scale of one to ten, how important each emerging issue is to each one of the components being forecasted for the internal perspective. For example, the trends from the internal perspective might include the number of students, the enrollment mix (science versus liberal arts), labor costs, median faculty salary, percentage of graduate students, percentage of federal aid to the institution, and so on. AT&T before its breakup, for example, produced a set of environmental planning assumptions for use by its member telephone companies in their internal planning. While the member companies were not required to use the parent corporation's planning assumptions, they were required to articulate whatever planning assumptions they used. When a member company used alternative planning assumptions, the alternatives were automatically included in the environmental scanning process of the corporation for its consideration in developing the planning assumptions for the entire corporation the following year. This example highlights the advisory nature of the results produced by scanning. The scanning group thus has no authorization to impose its particular perspective on any division or function of the institution.
For the issues that emerge as the most important, the next stage is to review the institution's scanning resources and match those most important issues with the resource base being used by administrators. At this point, the focus is to develop a monitoring capability to provide the earliest warning to the institution of any further developments as most important issues. For example, if university management is concerned about the percentage of students needing English as a second language, it may be desirable that one of the periodicals scanned is the magazine, Demographics. Again, a simple chart of events versus periodicals can quickly lead to the identification of issues that are not now being monitored. Results of the monitoring, then, are to change the resource base of information flowing to the organization.
When this process has been completed for the first time at an informal level, the cycle is ready to be repeated. By now, the executives who have been interviewed should be aware of a central point for reporting new ideas about the changing external world. They should be invited to continue to report on new or emerging issues again and again. Periodically the process of soliciting and evaluating issues should be repeated-eventually through regularly scheduled meetings in which everyone is "interviewed" at once, thereby saving time for those running the scanning system, decreasing the amount of time the process takes, and making the flow of external information more timely.
Eventually these meetings may evolve into a quasi-formal scanning committee that will meet periodically to review and analyze ideas about emerging issues and forward the most important ones to the formal long-range planners. To explore the issues in more detail than the simple probability-impact chart, members of the scanning committee may want to use a tool like the impact network to develop a sense of the nature and kinds of impacts an event may have. Note that the probability-impact chart provides for an evaluation of both positive and negative impacts. The scanning committee, for example, may want to consider the impact of an event on the institution's individual operations and whether these impacts are positive or negative. The purpose of this step is to provide more information about the nature and context of emerging issues and the possible opportunities and threats they pose.
As the scanning cycle is repeated, the function can become more formal with, for example, organized issues files, which might be based on the categories identified initially.
Link to Long-Range Planning
Traditional long-range planning begins with a thorough analysis of the current situation. As time passes, the process of keeping this status report current is known as monitoring. Monitoring produces the kind of information contained in annual reports-numbers of students, capital expenditures, number of faculty members, number of degrees granted, and so on. It provides a history of the institution's key features up to the moment. The focus of long-range planning has been to project this information into the future. But the difficulty with this kind of forecasting lies in the fact that the future fails to cooperate. Sooner or later the extrapolations of the past will be upset by external developments, surprises, and changes. A long-range planning function might have a dozen or more indicators of institutional performance as the subject of its forecasts, but as long-range planners discovered during the 1970s, these forecasts must be modified by a systematic inclusion of the possibility of surprise developments in the external world. No better method to evaluate change in long-range planning and forecasting can be found than that of calculating the impact of surprise events on trends through the probabilistic forecasting techniques like Monte Carlo and trend impact analysis where events are allowed to happen or not happen according to their probabilities, creating distributions of possible futures. Decision makers can then use these distributions of possible futures to expand their vision of what could happen to the trends they are monitoring and thereby provide the information needed to set institutional goals. Moreover, by using the probabilistic forecasting techniques described earlier, it is possible to obtain a range of forecasts of the impacts that different policies designed to implement these goals would have, thereby facilitating decisions about which policies to implement. Linking internal and external perspectives thus serves to enhance college and university planning.
Thus, the inside perspective was based upon a much more stable society, economy, and overall environment than was to be the case in the 1960s and 1970s. Consequently, forecasters and planners developed methods and concepts to include more and more of the external world in internal forecasting. For example, the method of trend extrapolation was modified to include the effects of "surprise" events from the outside world on trend extrapolations. This new method became trend impact analysis. Cross-impact analysis was developed to explore the interaction and interconnection of events. The concept of systems modeling was modified to include external changes; it became known as probabilistic systems dynamics.
Increased emphasis on taking account of changes in the external world continues today in issues management. That is, issues management reverses the inside-out perspective of traditional forecasting and planning to an outside-in perspective in which developments in the external world redefine the issues on which planning must focus. Implicit in this change is the recognition that external developments may have more influence over the future of an institution than previously thought. Moreover, the allocation of significant resources to external scanning assumes that the external environment of the 1980s and beyond will increase in importance as the pace of change continues--or accelerates.
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