EXTERNAL ASSESSMENT

• External Environment Assessment


  Helps the strategizing organization determine the most attractive opportunities to pursue and the threats to carefully avoid
• Macro environment


  Ushers in large scale changes, given the trends, patterns and cycles in the social, political, economic, ecological and technological landscape
• Micro market


  Presents smaller scale opportunities and threats provided by a particular location or by an immediate customer group (e.g., airline passengers traveling between two destinations)
• An organization pursuing a strategy that is not environmentally anchored is bound to miss its mission
• If the organization's mission still propels it to buck the trend, then it must consciously generate counter-currents that are large enough to alter events
• This requires great charisma from the strategist or the most cunning of Machiavellian minds
• It would take persuasive ideologues or versatile demagogues to displace entrenched values and attitudes
• Organizations which choose to swim against environmental currents must discover superior strategies to overwhelm the rushing waves
• The easier route towards strategic change, however, is to ride the waves even if these waves are only at their formative phase
• The strategic thinker must chart future organizational directions based on the ebbs and flows of environmental forces
• The strategic thinker must know what currents create groundswells and what cause whirlpools
• The good strategist must thoroughly assess the environment by obtaining information about the critical environmental factors that would influence the future
• Early trend spotter


  Very entrepreneurial, will be the biggest winner
• Late trend spotter

  Will flounder
• Stubborn trend stopper


  Will get buried alive unless he performs a miracle
• Five general areas of concern for Macro Environment Analysts


  • Social factors
  • Political factors
  • Economic factors
  • Ecological factors
  • Technological factors
• Social factors


  Encompass the demographic profile of the relevant population under study, including age, gender, income levels, education profile, health statistics, occupation/employment data, and psychological, religious, moral and cultural dimensions
• Political factors


  Deal with power structures and forces which influence an environment's governance system and its external linkages, including the existing government power elite and their oppositionists, religious sects, anarchists, business tycoons, activists, reactionaries, the military, revolutionaries, landlords, peasants, management, labor unions, the voting masses, and the laws, rules, regulations, procedures and processes which dictate the desired ideal behavior from the population
• Economic factors


  Involve all productive forces generated by capital, land and labor from both the formal and informal sectors of the economy, including investments, financing, revenues, costs, and economic indices like GDP, employment rates, inflation, interest rates, trade balances, etc.
• Ecological factors


  Include an area's natural resources, ecosystems and habitats which many stakeholders are competing for, and the quality of air, water, soil and waste disposal systems
• Technological factors


  Are embodied in the infrastructure, physical structure, machinery and equipment, operating systems, management processes, supplies and production or service requirements of public and private organizations, and determine the competitiveness and cost of doing business
• Mapping the Terrain


  1. Identify the deployment of resources and forces within an environment, and isolate the important variables which heavily influence that environment

  2. Conduct a meticulous study of vantage points and weak spots, concentrations and dispersions of energies and the highways and byways of change, along with the obstacles obstructing favored routes

  3. Visualize the environmental scenario as it unfolds and keep the envisioned state of affairs in mind

  4. Gather primary (first hand) and secondary (published) data through surveys, interviews, focus groups, Delphi method, brainstorming, etc.

  5. Look for information "funnels" or "bottlenecks" where data is concentrated
• Critical Thinking


  1. Apply analysis to break down information into parts and screen them according to relevance, magnitude, importance and urgency

  2. Apply synthesis to consolidate information into larger and more "visible" or "obvious" units, trace patterns, relationships and trends, and develop insights

  3. Use forecasting techniques, cause and effect analysis, data integration, correlations, and creative processes to piece together the past, present and future scenario
• Synthesis


  Can be arrived at through rational thought processes or through more imaginative and intuitive approaches
• Rational thought processes


  Require the mechanical application of logic
• Intuitive approaches


  Adopt the insightful leaps of creative discovery
• Psychic energies


  May be brought to bear on the creative process
• Tools of synthesis


  • Forecasting techniques
  • Cause and effect analysis
  • Data integration through pattern formation
  • Sequencing events through chronological parameters or through their degree of significance or influence
  • Correlations
  • Creative processes including the development of new scenarios
  • Innovative thinking
  • Intuitive or psychic leaps
• Sun Tzu


  Chinese general who wrote "The Art of War" 2,500 years ago
• The teachings from "The Art of War" have to be applied creatively to the Art of Peace
• Necessity of maintaining good spies

  In today's terms, that means up-to-date information using the latest in technological methodologies
• Position and strength of one's army


  Determine when to fight, when to stall and when to retreat
• In peace terms

  When to confront, when to maintain the status quo and when to collaborate
• In peace, unlike in war, there may be win-win situations, where two parties could advance each other's causes
• Guile


  For business or development managers, can be equated to sheer technical expertise and intellectual superiority
• Surprise


  Can be interpreted as speed of action
• Sun Tzu praises bravery, loyalty and full compliance with instructions as operational musts
• Operational tactics play a crucial role in achieving final victory
• Familiar with all the important variables of the battlefield

  • Isolate variables that help and those that hinder
  • Group variables that must be put together to attain success and variables that must be kept apart to prevent defeat
• Alliances along the way


  To effect mutually advantageous interdependencies