Environmental Scanning Is More than Reading a Magazine


Environmental scanning is the sum total of many efforts.

In the effort to educate HR professionals on being strategic we talk about the skill of environmental scanning and the value of understanding what impacts our organizations on a day-to-day basis so we don’t get caught with our pants down. (If you don’t know what that last phrase means… click here.) Last week I told you I was reading Jac Fitz-Enz’s book The New HR Analytics and that I would pass on lessons I learned to you. Here is the first one: Environmental scanning is more than reading a magazine!
For predictive management to be effective it requires an understanding of the external forces and internal factors that can affect the three fundamental areas of your organization. These are: 1) Human capital or your employees; 2) Structural capital, or the things you own, such as programs, patents, buildings and equipment; 3) Relational capital or the knowledge and contacts you have with external stakeholders, which includes just about everyone touched by your organization. Here are some of the forces and factors he said are important to look at:

External Forces

Internal Factors

Industry trends Vision, values, culture
Competitors Leadership
Technology advancements Mission-critical retention rates
Legal changes Engagement levels
Labor supply and job applicants Employee brand awareness
Stockholders Product life cycles
Customer demand and supplier capacity Skill and capability levels
Regional, national and global economies Financial capability

This list is not exhaustive and it may be much larger.
Fitz-Enz however, says that the list is not the only thing that is important, it is the interaction of the factors and forces on this list that is important. He proposes to us that the most useful way to use this information is by constructing a matrix that will quickly so the interplay of the various factors. Here is an example from page 50 of his book.

Organizational Capital




External Forces      
Labor Supply

Acquire & retain

Remodel workplaces

Find new contacts


Incent service

Sell off real estate

Retain customers

Internal Factors      
CEO’s Vision Translate for employees Make new signs and forms Advertise in market
Culture Employee branding Protocol review Talk to customers

This gives you an idea of the interplay between external and internal focuses across the three fundamental areas. Nothing happens in a vacuum. As Fitz-Enz says “The more you examine the matrix, the more you will understand how interdependent everything is within an organization.”
As I teach my students, it is important to realize that HR is a system. Things don’t occur without an impact somewhere else.
Next week a second lesson from Jac Fitz-Enz’s The New HR Analytics.

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