Environmental scanning is a key part of the strategy development process, which can be helped by AI tools such as Portage.
It seems that the world is changing faster every day and it's difficult to keep up. It's a challenge for leaders and strategists to plan and work within an increasingly complex and ever changing set of constraints. Whether its financial restraints from inflation, disruption from geopolitical events, supply chain interruptions, or technological shifts that require re-investment, it's never been more important for leaders to be able to understand these changes and make good decisions in response.
But before making a decision, you need to obtain the right information you need to make the best decision. This is where environmental scanning comes in.
Environmental scanning is the process of gathering, analysing and utilising information about events, trends, and relationships in an organisation's internal and external environment. It helps you anticipate change, reduce uncertainty, and develop more robust strategies that can withstand disruption. Without a thorough and ongoing environmental scan, your organisation risks being left behind by more agile and adaptive competitors.
Taking things back to the absolute basics, you can start to frame up environmental scanning as a key part of the OODA loop. While this approach is mostly associated with combat or emergency responses, it's a useful way to approach strategic planning. Before making decisions, you need to Observe the environment around you, Orient yourself with that information, make a Decision and then take Action.
At its core, an environmental scan involves:
It can also mean engaging with experts or other stakeholders to provide insights based on their experience or expertise. Many organisations also use data-rich approaches through market research, customer surveys, or other quantitative methods to gather information.
But conducting a comprehensive environmental scan is easier said than done. It requires sifting through vast amounts of information from a wide range of sources and connecting the dots between seemingly unrelated data points. Large firms have dedicated teams who can synthesise and prepare this information for decision-makers, but this is not always possible for smaller organisations.
Fortunately, advances in artificial intelligence (AI) are making it easier than ever to streamline and enhance environmental scanning. AI-powered tools like ChatGPT and Anthropic Claude can help you quickly gather and synthesise relevant information, uncover hidden patterns and insights, and even generate strategic scenarios and recommendations. When combined with a systematic process and human judgement, these tools can significantly improve the speed, scale and quality of your environmental scanning efforts.
In this article, we'll walk through a step-by-step process for conducting a thorough environmental scan using a blend of traditional and AI-powered techniques. We'll also introduce Portage, an AI-enabled strategic planning platform that can help automate and streamline the environmental scanning process.
One mistake is to approach the process as a scientist - that is to say, gathering as much data as possible to then arrive at a bottom-up conclusion. While you want to avoid confirmation bias, before starting your environmental scan, it's important to define the scope and objectives. What questions are you trying to answer? What decisions are you trying to inform?
Start by identifying the key strategic areas to focus on in your scan. This could include industry trends, competitor moves, customer insights, regulatory changes, technology developments, and more. Be thoughtful about what information will be most impactful. You can't (and shouldn't try to) analyse everything.
Next, set clear objectives for what you want to get out of the environmental scan. Are you looking to spot emerging opportunities? Anticipate potential threats? Benchmark against competitors? Validate assumptions in your current strategy? Having specific objectives will guide your research efforts, and don't forget that you can build a library of research over time as you cover different areas.
It's also important to determine the time frame you want to look at - are you assessing the next quarter, year, or decade? Different time horizons may require different types of information sources.
Lastly, be realistic about the time and resources you can dedicate to the environmental scanning effort. You may need to prioritize certain areas based on your capacity.
Tools like ChatGPT or Claude can help you zero in on what's most relevant and cut through the noise. You could prompt the AI assistant to suggest key areas to focus on based on your industry and strategic objectives, for example.
Or consider a platform such as Portage, which offers a curated collection of research reports across industries as well as a way to upload your own research documents. This can give you a quick pulse on what disruptive forces you should have on your radar. Use those insights to fine-tune your environmental scanning scope.
Investing time upfront to define a targeted scope and clear objectives will help later as you move into research and analysis. And if you choose to use AI tools, let them augment your judgement, but don't outsource this critical thinking entirely. Check and re-check their results, as well as consider running multiple iterations to make sure you haven't missed anything.
Information is everywhere these days. The challenge isn't finding information, it's selecting the right sources that will provide relevant insights for your environmental scan. I like to break this down into two main categories: internal and external sources.
Start by looking within your own organisation. There is often a wealth of information and insights right under your nose:
Make it a priority to tap into this internal knowledge. Set up a system to capture and share these insights across the organisation. It isn't enough to just have this information in a dashboard or monthly reports. It is important to synthesise this information into a narrative which explains the "why" behind the "what".
Cast a wider net by exploring information sources outside your organisation:
The sheer volume of external information can be overwhelming. Be selective and prioritize the most authoritative and reputable sources in your industry. Often industry lobbying bodies will provide summary reports or position papers but do be aware that these may have in-built biases.
It is also important to consider the source of the information. Is it a primary source (an original investigation or research) or a secondary source (a summary or analysis of primary sources)? Primary sources are generally more reliable but can be harder to come by and more expensive. Secondary sources can be a good way to get a quick overview, but you should be aware of their limitations and potential biases.
Advanced AI tools like ChatGPT can be a huge timesaver when it comes to gathering and making sense of information. You can use these tools to:
Tip: Do not ask AI to provide this information first-hand. The nature of LLMs are that they are good at generating content, but they are not reliable sources of facts or data. Treat them as "reasoning engines" not "databases".
To avoid getting overwhelmed, I suggest starting with a specific question or topic and iteratively refining the prompts based on the outputs. The more targeted and specific your inquiries, the more relevant and actionable the insights will be.
To help make a more concrete example, consider the following prompt approaches:
The first prompt is basic and is typical of how most people use AI assistants. While they are getting much better through their training to deliver a good output based on a simple prompt, you will get much better results with something like Prompt #2. The key difference is asking the AI to contextualise and tailor its response based on the specific information you have provided.
To help leaders use AI more effectively, Portage offers a Foresight Trends feature with a curated collection of research reports on various strategic topics. This can be a great starting point to quickly get up to speed on the key drivers shaping your industry.
You can also upload your own documents and sources into Portage and use the platform's AI capabilities to automatically identify and extract relevant insights using prepared summary and insights extraction prompts. This saves you time and ensures important information doesn't slip through the cracks.
The key is to be intentional and selective with your information sources. Focus on quality over quantity, and leverage tools like AI assistants or Portage to streamline the process and surface the most impactful insights. With the right mix of internal knowledge, external perspectives, and enabling technologies, you'll have a solid foundation for your environmental scan.
Once you've identified the most relevant and valuable sources of information for your environmental scan, the next step is to develop a clear plan for collecting that data. This involves deciding who will be responsible for gathering the information, setting a timeline with key milestones, and determining the methods and tools you'll use.
I recommend assigning specific roles and responsibilities to your team members. For example, you may have one person focus on internal data sources like customer feedback and sales numbers, while another tackles external sources such as industry reports and competitor analysis. Clarify expectations around what data each person should gather and by when.
Next, create a timeline for your data collection with realistic milestones to keep everyone on track. Factor in time for any approvals or coordination needed, especially for accessing internal data. Build in some buffer for unexpected delays.
You will also need a location where to store this information as you gather, process and generate insights. Online document repositories such as SharePoint, DropBox or similar are ideal as they enable easy sharing and team access, but also provide their own AI tools in their respective platforms.
Finally, this is also a great opportunity to embed this practice as a regular cadence to help with ongoing strategic planning. Part of the expense for doing this research is the start-up costs each time it's time to review the strategy. Instead, if your organisation has built a culture of not only collecting data, but synthesising it into digestible outputs, you will find it easier to revisit these topics on a regular basis.
So, you've gathered a lot of data from internal and external sources. Now it's time to make sense of it all. The goal is to identify patterns, trends and insights that will inform your strategy. Here are some tips:
As you review the data, keep an eye out for common threads. Are there any recurring issues or opportunities that keep coming up? Are different data sources corroborating each other? Or are they contradicting each other in interesting ways? Make note of any key themes that emerge. One approach is to use tags or other indicators on documents or pieces of information. You can then gather these tags together and synthesise the similarities and differences. Also consider using a virtual whiteboard tool like Miro or Mural to help visualise these groupings and connections between them.
Consider how the trends and insights could impact your business, both positively and negatively. Are there potential disruptions on the horizon that could pose a threat? Or are there untapped opportunities to capitalise on? Think through different scenarios and their implications. Again, using tags or other indicators can help note where these similarities and differences lie.
The sheer volume of data can be overwhelming to process manually. This is where AI tools like ChatGPT and Claude can be a huge help. You can feed them the raw data and have them summarise key points, identify trends, and even suggest strategic recommendations.
One technique I use is to break the data into chunks and feed them to the AI with specific prompts like "Summarise the key risks mentioned in this data" or "What customer needs are revealed in these survey responses?" The AI does the first pass of analysis and then I review, probe deeper, and add my own human interpretation on top. It's an interesting process to also compare AI generated summaries with human generated ones, as you may find that the AI is good at picking up on the key themes and nuances that human generated summaries miss.
If you're a Portage user, you can streamline your analysis by uploading the data you've collected right into the platform. Portage will automatically parse the documents and extract key insights. You can then easily map out these insights on a Board and use them as inputs for scenarios or impact analysis.
I find it helpful to tag and categorise the uploaded data so it's easy to segment and analyse by topic, source, date, etc. Portage's AI features will also serve up related trends and insights to enrich your analysis.
The final step is to translate the insights into concrete actions. What decisions or changes should you make based on the data? If using an AI tool, prompt it to suggest high-level recommendations. Portage has scenario planning and strategy mapping features that allow you to play out different actions and gauge their impact.
The key is to be proactive and have your environmental scan analysis ready to anticipate change and to react to disruptions when the arise. Remember that the data is never going to be perfect. You are never going to have all the information, and you are never going to be able to predict the future with certainty. What you can do is to use the best data you have access to, to make the best decisions you can, and to be willing to adapt and change as new information comes in.
Now that you've collected and analysed all this valuable data, it's time to put it to work in your strategic planning.
I like to start by looking at the most impactful trends and insights that emerged from the environmental scan. What are the key opportunities or threats that could significantly shape the future of our business or industry? While you certainly can do a traditional SWOT analysis of this information as your starting point, I find that given the volatility and complexity arising today, that scenarios offer a more useful approach.
Using a tool like Portage, you can input these key trends and insights to generate a range of plausible future scenarios. The scenario generation features in Portage are extremely helpful for sparking creative thinking and considering possibilities that may not have been clear before. The AI does a lot of the heavy lifting in terms of analysing the inputs and suggesting coherent, thought-provoking scenarios to consider.
From there, it is important to stress test existing strategies against these different future states. How would current plans hold up if Scenario A or Scenario B came to pass? Where are the vulnerabilities? This exercise often reveals the need to adapt or develop new strategic initiatives to capitalise on opportunities and mitigate risks illuminated by the scenarios.
If anything is clear from today's ever-changing world, it's that strategy can't be a static, one-and-done exercise. Set up regular reviews to monitor the external environment and revisit your strategic assumptions. Portage can help by continually scanning for new signals and alerting you to shifts that might impact your strategy. The goal is to create an agile, insight-driven strategic planning process that enables you to adapt quickly as conditions change.
Regularly translating insights into strategy can be a difficult and time-consuming process, but the payoff is creating a more resilient, future-proofed organisation. Leveraging tools like AI tools such as ChatGPT, Claude or Portage, and embracing a fluid, scenario-based approach to planning can help you gain the confidence to make the key decisions you need to thrive in a world of accelerating change.
Environmental scanning is a critical tool for strategic planning in today's rapidly changing business landscape. By following the steps outlined in this guide, you can develop a comprehensive and effective process for conducting an environmental scan that will help you stay ahead of the curve.
To recap, the key steps are:
Throughout this process, AI tools like ChatGPT and Anthropic Claude can be incredibly valuable in helping to gather, summarise and make sense of large amounts of information. The key is to use prompts and techniques to manage these tools effectively, so they enhance rather than overwhelm your process.
Portage is another powerful tool that can simplify and supercharge your environmental scanning. With its curated collection of strategic trends and ability to extract insights from your own data sources, Portage streamlines getting the inputs you need. You can then feed those trends and insights directly into Portage's scenario planning and other strategy tools.
While this guide provides a solid foundation, the most important thing is to actually implement regular environmental scanning in your organisation. The companies that can effectively anticipate and adapt will be the ones that thrive. So, I encourage you to use the steps and tools covered here to build a robust environmental scanning process into your ongoing strategic planning efforts.
