Strategic early warning system

The aim of an Strategic Early Warning System (SEWS) is to assist organizations in dealing with discontinuities or strategic “surprises”. By detecting “weak signals” (Igor Ansoff, 1975), which can be perceived as important discontinuities in an organizational environment, SEWS allows organizations to react strategically ahead of time.

Underlying theory

The underlying assumption of SEWS is that discontinuities do not emerge without warning. These warning signs can be described as “weak signals”. The concept of “weak signals” (Ansoff, 1975) aims at early detection of those signals which could lead to strategic surprises and to an event which has the potential to jeopardise an organization’s strategy. Furthermore, the concept of a SEWS is intended to constitute an important part of a strategic management system, operating real-time in an organization, and assisting in identifying the new, which emerges as “weak signals”.

Detecting “weak signals” is achieved by scanning the organizational environment. The concept of environmental scanning (Aguilar,1967) describes a process whereby the environment in which an organization operates is systematically scanned for relevant information. The purpose is to identify early signals of possible environmental change and to detect environmental change already underway.

The need for a formal strategic early warning process in organizations is based in large part on the existence of blindspots at their top, which prevents leaders and executives from identifying weak signals of change (Gilad, 1998). Any formal SEWS process must incorporate blindspots analysis as part of its cycle.

Phases

The ideal SEWS process has three phases.

*Phase 1 is characterised by the information gathering of “weak signals”, or trends and issues. The scanning itself relies primarily on examining various media sources, the technique of content analysis (Nasbitt, 1982). The scanning activity is complemented by monitoring trends and issues that have already drawn attention.
*Phase 2 is one of diagnosis, which is characterized by three steps:
** In-depth analysis of the trend or issue, examining the core and the various contexts of this phenomenon. The aim is to gain an impression of the possible potential development of an issue or trend. Stakeholder theory may be used to understand actors in a specific industry (Comai and Tena, 2006)
**The second step has several objectives.
***The attempt should be made to think creatively about how the particular trend or issue could evolve.
***The nature of the contexts needs to be examined in order to cluster several trends or issues, thus providing an understanding of the mutual influences on and of trends and issues.
***It is important, due to the limited resources in any organization, to identify and select those trends and issues that are particularly relevant.
*Phase 3 describes the formulation of an appropriate strategy to react to the trends and issues which have been identified and labelled as relevant.

References

*Aguilar, F. J. (1967), Scanning the Business Environment, The Macmillian Company, New York.
*Ansoff, H. I. (1975), “Managing Strategic Surprise by Response to Weak Signals”, California Management Review, vol. XVIII no. 2, pp. 21-33.
*Ansoff, H. I. (1980), “Strategic Issue Management”, Strategic Management Journal, vol. 1, pp. 131-148.
* [http://www.amazon.com/Mapping-Anticipating-Competitive-Landscape-Alessandro/dp/8493517879/ref=sr_1_1?ie=UTF8&s=books&qid=1223493913&sr=8-1 Comai, A. and Tena, J. (2006), Mapping and Anticipating the Competitive Landscape. Emecom Ediciones, Barcelona.]
*Nasbitt, J. (1982), Megatrends, Warner Books, New York.
* Gilad, Ben (1998). Business Blindspots. UK: Infonortics.
* [http://www.amazon.com/dp/0814407862 Gilad, B. (2003), Early Warning: Early Warning: Using Competitive Intelligence to Anticipate Market Shifts, Control Risk, and Create Powerful Strategies", AMACOM]

ee also

Society of Competitive Intelligence Professionals