The demands of caring for
the day-to-day needs of a small business can be life consuming. Often small business owners are too busy
working in their business and neglect an equally important task of
working on their business. Understanding
the changing dynamics of the marketplace and strategically positioning your
business to meet those changes is critical to the long-term success of your
business.
“Environmental scanning”
or simply “scanning” is one common and effective technique to aid in
understanding the changes that may impact your business. Scanning, in a general sense, refers to the
collection and evaluation of information, both inside and outside your company
which may affect your future operations.
The process of scanning does not have to be a formal activity, but it
should be undertaken on a regular basis to ensure some consistency in what
information is observed.
The scanning process
consists of two distinctive analysis facets; one is internal and the other
external. Internal scanning, as the name suggests, looks
inward to the business and is more familiar as a process to many small business
owners evaluating the strengths and weaknesses of their organization. Checking sales volumes, monitoring inventory
levels, and tracking other key performance metrics are common examples where a
changing trend should serve as an alert to the owner. In a
less pronounced way, a subtle change in tone during staff meetings, an increase
in absenteeism, or a sudden increase in turnover could be a signal.
By contrast, external scanning is examining information outside the business and focuses on two key issues. The first is what information should you look at and second how frequently you will look. To minimize the amount of time dedicated to external scanning, identify the key sources of information you want to know. At the most basic level, evaluate things about your customers, competitors, and suppliers. Assess how they are changing and how that change can affect your business. At a higher level consider the industry as a whole. Identify and compare your company with key success factors or best practices within the industry. Consider too the attractiveness and growth prospect for the industry. Finally, at a macro level, evaluate political and social changes, technological developments. While it is useful to gain a broad sense of understanding, it is more critical to use the information gleaned from scanning activity to assess the impact on your company. We touched on how often to scan a bit earlier, but remember not all change occurs at the same pace. Political changes tend to be more gradual while technological changes happen very quickly in certain industries.
In a way, much of what we’ve discussed suggests an informal approach to scanning. Tools and techniques are readily available to aid in conducting formal, documented scanning activities.
Finding the time to perform this assessment while meeting the day-to-day needs of your business may be difficult. During a previous segment on time management, we suggested making an appointment with yourself on a regular basis – keep that appointment and use that time to scan.
Successfully scanning the environment can position your company to remain competitive by anticipating and strategically responding to change. In short, it can make you a stronger company.
By contrast, external scanning is examining information outside the business and focuses on two key issues. The first is what information should you look at and second how frequently you will look. To minimize the amount of time dedicated to external scanning, identify the key sources of information you want to know. At the most basic level, evaluate things about your customers, competitors, and suppliers. Assess how they are changing and how that change can affect your business. At a higher level consider the industry as a whole. Identify and compare your company with key success factors or best practices within the industry. Consider too the attractiveness and growth prospect for the industry. Finally, at a macro level, evaluate political and social changes, technological developments. While it is useful to gain a broad sense of understanding, it is more critical to use the information gleaned from scanning activity to assess the impact on your company. We touched on how often to scan a bit earlier, but remember not all change occurs at the same pace. Political changes tend to be more gradual while technological changes happen very quickly in certain industries.
In a way, much of what we’ve discussed suggests an informal approach to scanning. Tools and techniques are readily available to aid in conducting formal, documented scanning activities.
Finding the time to perform this assessment while meeting the day-to-day needs of your business may be difficult. During a previous segment on time management, we suggested making an appointment with yourself on a regular basis – keep that appointment and use that time to scan.
Successfully scanning the environment can position your company to remain competitive by anticipating and strategically responding to change. In short, it can make you a stronger company.
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