Contents
Introduction
I.1. Anticipative strategic scanning
I.2. Acknowledgments
1 The Subject within the Field of Management Science: Concepts and Issues
1.1. Strategic management and strategic decision-making ….
1.2. Strategic decision-making and anticipation
1.3. Anticipation, anticipative information and weak signals
1.4. Weak signals and anticipative strategic scanning
1.5. Organizational issues in anticipative strategic scanning, which could weaken strategic decision-making
1.6. Conclusion: concepts discussed, issues noted and resulting requirements
2 State of the Art: Systems Suggested by Previous Authors
2.1. Entry point: collective interpretation of a set of homogeneous weak signals to make sense
2.2. Directly detecting a weak signal in a full text
2.3. Automatically selecting a “useful” information fragment (a “brief”, for our purposes)
2.4. Improving weak-signal detection by improving the target
2.5. Conclusion
3 Proposed Systems: Results of Information System Prototyping Research Conducted at the CNRS-CERAG Lab (France)
3.1. TARGETBUILDER, an aid to targeting scanning priorities
3.2. APROXIMA, automated extraction of fragments (briefs), which may hold weak signals
3.3. ALHENA, an aid to finding connections between weak signals
3.4. Conclusion
Conclusion
Glossary
Bibliography
Index
First published 2014 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
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© ISTE Ltd 2014
The rights of Humbert Lesca and Nicolas Lesca to be identified as the author of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
Library of Congress Control Number: 2014934505
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library
ISSN 2051-2481 (Print)
ISSN 2051-249X (Online)
ISBN 978-1-84821-609-9
VERBATIM I.1.– (transcription of recordings made during consultancy visits to organizations).–
“How can we detect any potential weak signals within big volumes of digital data? How do we interpret the weak signals thus brought to light? How can we train people in the organization to perform this type of task?”
In other words, the question is “What actionable knowledge (methods and computer-based techniques) would you recommend for serving the aforementioned purposes?”
The study of the exploitation of weak signals in organizational strategy is a challenging business, and one which has only been being practiced in organizations surprisingly recently. The concepts involved are relatively numerous, and the definitions given for such concepts may well vary from one author to the other. The real-world application of these concepts is rarely touched upon in the existing body of literature, and this gaping lacuna is a hindrance to the development of anticipative strategic scanning, in commercial companies and public organizations. Therefore, this book aims to introduce working methods and computer-based systems to facilitate experimentation and operational implementation. Chapter 2 of the book presents the state of the art on the topic, gleaned from the publications of academic researchers. Chapter 3 then gives a presentation of three operational systems and looks at the case studies for their application.
The “scanning” of an organization’s environment to aid in strategic decision-making is not really a new idea. The precursor was, undoubtedly, set by F. Aguilar, with his book Scanning the Business Environment, which was published in 1967 [AGU 67]. Then, after a period of relative silence on the subject, a clutch of articles and books were published around the early 1980s, such as Managing Strategic Surprise by Response to Weak Signals by H.I. Ansoff in 1975 [ANS 75]. Thereafter, there were few new publications on the subject until the late 1990s. A new wave of publications began in the early 2000s and has continued steadily ever since. One of the major reasons for this is the rapid progress of online data-mining technology.
Paradoxically, “environmental scanning” and anticipative strategic scanning have not yet become as widely used in companies as might be suggested by the high number of academic publications on the subject. The explanation for this paradox probably lies in the following two facts:
– The considerable progress in information-seeking technology has led to a real problem of information overload both in private enterprises and public organizations; managers are rarely well prepared for anticipative scanning of the business environment.
– There is, as we have just seen, an over-abundance of raw information (data), but techniques to make sense of these data are not progressing at the same rate, leading to situations of information overload. Furthermore, in the area of education, practically no institutions or universities have introduced training courses in the area of anticipative strategic scanning and the use of weak signals in strategic decision-making.
At present, the techniques for mining raw data are continuing to progress faster than techniques and expertise (particularly those relating to the detection and interpretation of weak signals). However, we have clearly seen a proliferation in demand from managers on the ground, including those formulated above or those expressed by the verbatim quotes peppered throughout the chapters. It is this demand that this book aims to satisfy.
The innovative systems presented in Chapter 3 are the product of doctoral research projects conducted at the Centre d’Etudes et de Recherches Appliquées à la Gestion (CERAG), at the university of Grenoble-Alpes, France. Edison Loza Aguirre worked on the TARGETBUILDER project, Alex Buitrago worked on the APROXIMA project and Annette Casagrande worked on the ALHENA project. The authors would like to express their heartfelt thanks and their best wishes for these researchers’ work in the future.
Management science aims to help managers in making decisions. Such decisions include information of a strategic nature, and they are the basis of “strategic management”. Decision-making relies, notably, on the use of relevant information. This information is itself produced by an information system (or several such systems). Hence, strategic management of an organization and the management of the information systems are highly interdependent. The interplay between these two fields is illustrated in Figure 1.1.
A number of authors have looked into the characteristics of information systems for strategic management. One such author is D.C. Bernhardt, who expresses what managers want thus: “I want it fast, factual, actionable” [BER 94].
More recently, Xu et al. [XU 11] conducted a survey of UK executives. “Three focus group sessions were conducted with a total of 31 middle and top-level executives […] Most of the participants are at strategic (48%) level and tactical level (39%) and involved in some forms of executive intelligence activities. Each session began with a brief statement on the rationale and objectives, the confidentiality and ground rules for the discussion (e.g. role of moderator, one participant talks at a time and disagreement is welcomed), and the demonstration of the visualization model. Focus group sessions took about an hour to complete. The focus group discussion allows taping [sic.] into human tendencies” [XU 11, p. 192].
What information about the organization’s environment do executives want when making a strategic decision? The following results give us a clue:
Organizational strategy is of prime importance in management science. The word “strategic” may refer to one of two things: the decision-making process whereby a strategic plan is drawn up as a guide to action or the actual implementation of the strategic plan on the ground (the “roadmap”). In both cases, time is of the essence: it takes time to draw up a strategic plan, and the action may take place in future years and, therefore, over the course of several or even many years. Anticipation is therefore a prerequisite.
One of the main questions that managers (likely) ask themselves is: “What is the strength of my organization today? What will it be tomorrow?”. The answer to this question sheds light on the area in which the manager needs to make the decisions that are vital for the success of the organization both at present and in the future.
A strategic strength for today may well no longer be as strategically important tomorrow. It is therefore vital to detect, as early as possible, any drivers of change that might emerge in the organization’s environment, and the signs that herald these changes, in order to be able to take account of them in strategic decision-making. Exaggerating somewhat, we might say: “Tell me the ‘driving forces’ behind your organization and I will tell you what the key information is which your organization absolutely must research on the subject of the (internal and external) changes for which it needs to be prepared if you want sustainable competitiveness”. Such information is gleaned from an information system for strategic management.
In preparing this book, we conducted interviews with numerous managers; verbatim quotes are given throughout the book. Some managers stated that they were not overly concerned by environmental scanning as such: the environment is, in their eyes, too fuzzy a notion to be truly motivating. On the other hand, those same managers appeared more motivated by the notion of a project.
EXAMPLE 1.1.– (Petrobras)
“There are many, many challenges at the moment… but we are beginning to see the effects of a completely pragmatic, project-based policy” [THE 13].
As soon as the desire to conduct a project emerges, such managers seek to gather the useful information to facilitate the implementation of that project. The concept of a project is therefore important in terms of triggering and structuring environmental scanning. Nevertheless, it gives us only a partial answer to the question at hand. Indeed, when a project surfaces, it becomes easier to see what information needs to be gathered, but in order to get to this point, environmental scanning needs to be performed first, so as to detect opportunities for projects. Two cases must therefore be distinguished:
The delimitation of the field of environmental scanning is not obvious; it arises from a choice rather than from a prerequisite. Each organization needs to reflect on what it deems important to scan in order to feed into its strategic thinking, and that choice is, in itself, a strategic decision. Yet this choice may not always be made in a methodical manner.
In fact, there are two dangers which the organization needs to consider:
VERBATIM 1.1.– (industrial sectors)
“We do not go looking for information. We content ourselves with the information that comes to us.”
“We do not have any sort of organized system with regard to anticipative environmental scanning. Certainly, pieces of information are given by one person or another, but without a specific goal, on a case-by-case basis, depending on each individual’s perception of matters.”
“We have a great deal of information, but it always reaches us too late. I’m constantly running to catch up with things that have already happened.”
“We have a great many information circuits, but for day-to-day information. If a piece of information which acts as an early warning signal for a genuine change in the environment is channeled along one of those circuits, there is a high chance of it being lost.”
Strategic decision-making and anticipation should, logically, be very closely bound together: “[…] environmental scanning is integrally linked to organizational and strategic planning and plans for unexpected changes that will affect the organization" [ALB 04, p. 41].
A condition sine qua non, when initiating a new strategy, is knowing the relevant environment and anticipating evolution of that environment. This involves anticipating in order to:
The external environment in which the strategic decision needs to be made and implemented is:
Ultimately, we speak of turbulence and uncertainty.
VERBATIM 1.2.– (AXA Insurance)
“Increasingly, we are having to anticipate in terms of our competitors, new banking technology, lobby groups, associations, federations, and even the new national and international regulations, etc.”
“Organizations today face unprecedented challenges in maintaining commercial survival and success. Success requires a keen strategic understanding of external influences in order to respond in ways that will ensure the organization’s survival and success" [ALB 04, p. 39]. On this point, the manager’s attitude is of crucial importance.
EXAMPLE 1.2.– (survey put to 309 managers in the United States) [QIU 08]
The survey shows that scanning of the organization’s relevant environment depends primarily on the attitude of the managers. The organization’s competitive intelligence is greater when the managers have a proactive attitude, driven by the will to find a representation that clarifies the opportunities and threats in the environment in order to be able to respond to them quickly.
What marks the difference between the attitudes of two managers with regard to managerial scanning behavior? Two major aspects are held up in the literature:
We will come back to these concepts later on.
These three periods, anticipating, deciding and implementing, are of different durations. The third period, which is generally the longest, may be carried out over several or even many years.
With regard to the total lifetime of a strategic decision, we can distinguish three periods:
Triggering is the arousal of the desire to move toward a new strategy. In general, the act of environmental scanning and anticipation of any evolution in the environment will trigger the perception that it is opportune to make a decision: “The prerequisite for dynamic business planning is to capture this unknown“ [ILM 06, p. 909].
Anticipation is a necessary condition, depending on the case, for reactivity or proactivity: “[…] then distinguish between two types of early warning systems (EWSs): (1) proactive, in which an organisation first determines which issues it finds important and then goes about monitoring those issues; (2) reactive, in which an organisation uses the EWS as a radar looking for unexpected changes” [BOT 10, p. 457].