The “Scanning, Sensing and Acting” framework presented in this article starts with the statement that organizations need not only to have the “map” of their territory, but also the “radar” that can place and guide them in turbulent, ambiguous, and uncertain environments (Aguilar, 1967, Wack, 1985a, Day, Schoemaker, 2006).
Stage 1: “Designing and Training”
This is a crucial stage of the framework that deals with the specific design of the process, the presentation of the process to the company (“client”), the training of the participants in the project and the end-to-end preparation of the entire process.
In this first stage, we can underline important decisions and activities (there is not a single sequence for the activities presented below and they are not necessarily included in all projects).
The analysis and a deep profiling of the client, the decision-makers and the stakeholders are important tasks to identify and clearly distinguish who the client is, who the decision maker(s) is (are), and what are the most important stakeholders. This is also crucial to decide and clearly define the rationales and objectives of the process, and to select the project team (or core team), participants and experts to be involved in the project.
A key question in any process that includes strategic thinking and action is the support and the presence of the top management in critical moments of the process. This is very important not only to make the (sometimes difficult) connection with the decision makers, but also to get leadership along the process.
A training or “sensibilization” session for the participants is fundamental when we are dealing with specific terms and concepts that may not be familiar to managers. In this sense, this is a key activity in the conceptual model. It includes the presentation of the different phases of the process and a rigorous explanation of key concepts of Environmental Scanning, Competitive Intelligence and Scenario Planning to the project team, distinguishing the concepts of trends, uncertainties, Weak Signals and wildcards, and explaining what the scenarios are.
Finally, this process is based on a workshop format with a strong participatory and co-creative approach with most of the work being made within working groups, using creative and participatory techniques. Depending on the time available and the specific objectives of the process, it’s possible to include some research desk work between specific stages of the process where the facilitators and participants make specific contributions that will be used as inputs for the following workshop sessions.
Stage 2: “Scanning”
The second stage of the conceptual framework is about the “Scanning” of the external environment of the organization and includes critical decisions that will guide and impact the entire process and results of the project.
Two of the most fundamental decisions in all the process are the definition of the strategic focus and time horizon. These decisions will have a major influence on the more exploratory or decision-making orientation of the process (Schwartz, 2001, Ogilvy, Schwartz, 2004, Wilson, 2000; 2006). They will also determine the possibility of using different approaches for scanning the environment. (vd. the differences between a more exploratory environmental scanning process versus a more decision-oriented Competitive Intelligence process).
Those decisions about the strategic focus and the time horizon are not predetermined or necessarily given by the “client” or the decision-maker and can be decided in a brainstorming or interviews with different kinds of people from inside and outside the organization.
One of the important premises of this conceptual model is that the scanning is not only focused on the so-called “transactional” or competitive environment of the company, where we can use some kind of general “framework” (vd. Porter’s five forces model). It’s very important that the participants or the project team start the scanning process with an “outside-in” approach, trying to identify relevant information in what we can call the “contextual” or more distant environment (Schwartz, 2001, Godet, 1993, 1997a, Heijden, 1996). Relevant information means information that besides being distant from the company’s competitive environment or the strategic focus of the process can have an important impact on both “targets”.
To facilitate this process of exploring the impacts of distant drivers in the strategic focus of the process we can use different kinds of tools or exercises. The scanning of global drivers or trends can be done through a STEEP analysis (the acronym for Society, Technology, Economy, Environment and Politics) or using other type of framework.
Another distinctive premise of the model is the critical importance, in the scanning stage, given to the categorization of multiple types of information and different types of sources of information.
The scanning and categorization of different types of information imply that participants will have to organize all the information gathered in the scanning process by categories: megatrends (Godet, 1993, Naisbitt, 1982); trends, Weak Signals (Ansoff, 1975, 1984, Lesca, Blanco, 1998, 2002, 1999); wildcards (Mendonça et. al, 2004) and uncertainties (Schwartz, 2001, Heijden, 1996, Godet, 1993, Notten, 2002).
The use of different types of sources implies that along the process the participants are invited to search in different types of information sources.
The result of this scanning stage, which can combine a participatory and interactive workshop approach and a subsequent research desk work, is the building of what we call a “Scanning Dashboard”, where all the relevant information is presented in an organized and visual way.
This “Scanning Dashboard” is developed around the selection, categorization and positioning of different types of driving forces In the research that was made we used a two dimensional “radar”:
Information categorization: Megatrends, Trends, Wildcards, Weak Signals, and Uncertainties.
Frameworks to organize information in the “transactional” and the “contextual” environment” (we can combine a STEEP Analysis with other frameworks like the Porter’s Five Forces Model).
Stage 3: “Sensing”
The third stage, that we called “Sensing”, starts with the building of the Scanning Dashboard and it is based on the selection, exploitation and interpretation of the multiple and different types of driving forces, selected and structured in the previous stage of the conceptual model or framework.
Although we can use the “Scanning Dashboard” as the basis for the Scenario Planning process, it’s possible to include an additional phase in the process, which implies the building of a system diagram.
This structure or system diagram can be developed from a deeper analysis and further selection of the different categories of information included in the “Scanning Dashboard” and should provide a more integrated and systemic view of the problem or the strategic focus. In this step, it’s important to assure that this structure or system diagram doesn’t get too complex in its building process and presents itself sufficiently “readable” and useful to the participants in the process.
The central part of this third stage of the conceptual model is based on the building of scenarios, using a co-creative and participative approach with the project team working in groups and being involved in all the steps of the Scenario Planning process.
The Scenario Planning process used is strongly inspired by the so-called “intuitive-logic” school of Scenario Planning, with a special focus on the Shell and GBN approach of scenario building (Shell, GBN, Schwartz, Wack, Heijden), with some important adaptations.
With the initial decisions and steps of any Scenario Planning process already made in the previous scanning stage, namely the definition of the strategic focus and time horizon, and then the scanning and identification of the most important driving forces, the crucial step in this phase of the process is the selection and definition of the critical uncertainties (Schwartz, 2001, Ogilvy, Schwartz, 204, Heijden, 1996, Scearce, Fulton, 2004) and the definition of contrasted configurations with the subsequent work around its specific meaning, scope and description.
It’s from the critical uncertainties and subsequent possible evolutions (contrasted configurations) that the participants will build the scenarios structures (Ogilvy, Schwartz, 2004; Scearce, Fulton, 2004). These “structures” work as the main frameworks for each of the scenarios to be further developed and described (we are using a “deductive” approach to the scenario building).
The fundamental work of selecting the critical uncertainties is made from the “Scanning Dashboard” (and the structure or system diagram, when there is time and resources for it) and the selection of critical uncertainties from the several uncertainties identified in the previous stage of the process.
The other information presented in the “Scanning Dashboard” (Megatrends, trends, Weak Signals, and wildcards) can be important in the scenarios building process, with a particular focus on the role of Weak Signals as sources of emergent or new issues that can influence the structure and internal dynamics of the scenarios to be developed.
As mentioned above, scenarios can be used as multiple and contrasted “Contexts” or “Environments” to explore and make sense of different trends, Weak Signals and wildcards identified on stage two of the conceptual model.
Stage 4: “Acting”
The fourth stage, that we have called “Acting”, includes the exploration of the scenarios and can include the identification of implications and options, the definition of a set of possible strategic responses or even the definition of a strategic vision for the company or business unit.
Although we can use multiple management and innovation methods and tools in this forth stage of the conceptual model, the use of a specific tool and subsequent expected results must be clearly defined in the beginning of the process (when we are defining the objectives and outputs, and designing the entire process in detail).
The objectives and purposes of an environmental scanning and a Scenario Planning process can be more exploratory (vd. identifying challenges and opportunities) or more decision-oriented (vd. responding to a specific strategic decision).
In both cases it’s very important to bear in mind that scenarios are a powerful tool to deal and incorporate uncertainties in the strategic decision process, they can work as an input to change the mental models of the decision makers, and can be used as an organizational learning tool.
This forth stage of the process explores how we can identify key implications and develop strategic options from the scenarios, described and presented in the previous stage, and allows the simulation of different competitive environments which are able to stimulate the participants to answer to specific challenges related to the strategic focus of the process.
As mentioned above, the developed scenarios can be used to achieve different goals and can be combined with several concepts and management tools, among which we can highlight the following:
Probe Implications (what the meaning of each scenario is and what they imply to the company) and Strategic Options (confronted with alternative competitive futures, which options are the most appropriate to face in each scenario?);
The scenarios being used to design more elaborated and integrated Strategic Responses;
The scenarios helping a company or a business unit to (re)design its “Business Idea”, using the concept of the “business idea” by Heijden (Heijden, 1996);
The Key Competitive Factors and Key Internal Factors to be developed and pursued by the company in each scenario.
Besides this very diverse use of the scenarios as a strategic management tool, they can also be used as an organizational learning tool, helping to stimulate and institutionalize a “Strategic Conversation” (Heijden, 1996, Heijden et.al, 2002).
The question in this fourth stage is not about what we can do with the scenarios developed in the third stage of the process, but rather what we want to do with them from the beginning of the process.
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