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Pathways to the Future: Linking Environmental Scanning to Strategic Management by
Thomas V. Mecca and James
L. Morrison Mecca,
Thomas V. and James L. Morrison. (1988) Linking
Environmental Scanning to Strategic Management. Community college review, 15(4),
35-44. In the last two decades, the environment of two-year colleges, like that of other types of educational organizations, may be best described as turbulent. The growing emphasis by federal and state governments on fiscal and educational accountability, the shifts in public opinion regarding the appropriate mission and role of postsecondary education, and the pervasive influence of the new emerging technologies throughout society are but a few of the environmental changes the two-year college must face as it moves into the future. The
ability to analyze environmental change and formulate appropriate institutional
strategies for successfully adapting to such change is critical for successful
two-year college administrators. The effects of the general societal environment on the tasks of
organizations is well documented in the literature of organizational analysis
(Osborne & Hunt, 1974; Hall, 1977; Kast & Rosenzweig, 1979; Scott,
1981). Current contingency approaches to
organizational theory have increasingly focused the attention of organizational
analysts upon the role of environmental uncertainty and its perception by
decision-makers in their formulation of organizational strategy (Anderson &
Paine, 1975; Duncan, 1972; Lindsay & Rue, 1980; Boulton, Lindsay, Franklin
& Rue, 1982). Bourgeois (1980)
emphasized that an organization's primary strategy of domain selection involves
a scanning of the general environment both for broad trends that affect the
organization's mission and for the identification of new organizational tasks. Traditional
educational planning processes are weak in facilitating the identification of
critical trends and future events and assessing their impact on education.
At best, most planning models assume their will be a
"surprise-free" future in which present trends continue unabated and
the interrelationship between and among social, economic, political, and
technical forces remains essentially the same (Ziegler, 1972).
We know that this is not true; environments are marked by rapid and
unanticipated changes. What is needed is
a model process that enables us to detect
signals of change (i.e., emerging trends, issues, or events) that make the future
of our institutions different
from their past, and a plan for conveying
this information to the organization's strategic management. All
organizations acquire information from their environment in some form.
However, Aguilar (1967) suggests that environmental assessment can be
made more effective where a formal search replaces the informal search of the
environment. The process of environmental scanning is described by Terry (1977)
as consisting of three essential stages:
The
possible linkages that can be made by a planning team between environmental
factors and strategic elements through the use of futures research
techniques is
outlined by Klein and
Newman (1980) in their description of the use
of the SPIRE planning model
in the oil industry. Cope (1978), although not
discussing the integration of
environmental scanning into the process of strategic
planning per se, outlined the use of such futures research techniques as
probability/diffusion matrices, force-field analysis and value profiling for
forecasting changes in a college's or university’s environment.
The application of environmental analysis in developing strategies to
meet state-mandated reduction in force in a college is
discussed by Dube and Brown (1983). A
detailed discussion of the
use of such futures research techniques as Delphi, cross-impact analysis,
impact-networks and policy-impact analysis in developing a comprehensive
environmental assessment that can be incorporated into
a college's or university’s strategic planning process is presented by
Morrison, Renfro, and Boucher (1984). In
keeping with its theme, "Pathways to the
Future," the
authors conducted a one-day workshop
at the AACJC's 1986 annual meeting in Orlando, Florida, devoted to training
participants in such a process. ED QUEST (Quick
Environmental Scanning Technique)
is an environmental scanning model designed to identify emerging critical trends
and future events that
portend threats and opportunities for educational organizations.
ED QUEST analyzes the probable impact of these variables on the college,
and plans ways to facilitate the development of appropriate organizational
strategies. The model, adapted to
education from a similar one first
used with insurance executives (Nanus, 1982), is designed to
use futures
research techniques and
divergent thinking methods within a group process mode to focus key institutional
decision-makers' attention
on the critical
environmental changes that could affect their institutions' future.
Although just being introduced into the field of two-year college
administration, ED QUEST has been used by administrators and planning teams in
other sectors of education interested in developing strategies for alternative
futures (Mecca and Adams, 1982). It is
currently being used at Piedmont Technical College (Greenwood, SC) and is being
introduced into several other two-year colleges. Unlike
more elaborate strategic processes, ED QUEST can be easily and quickly
implemented. It
provides a framework within which an institution can incrementally design a more sophisticated process, since the model
contains all the basic and essential elements of strategic planning.
Moreover, its implementation does
not require a major expenditure of funds for specialized technical services or
personnel. With a minimal amount of
training, a person from within the
college can successfully facilitate the process. The
results of the
ED QUEST process provide institutional decision-makers with
A
characteristic of ED QUEST, therefore, is that it
tailors the product of the environmental
scanning process to the user's college and does not
rely on an environmental analysis based
upon the perceptions of persons outside the
college. The information generated from the
process becomes the basis for on-going strategic management. To
demonstrate the model during the
1986 AACJC workshop, the participants were asked to simulate the activities
of an ED QUEST planning team of a
hypothetical
public two-year institution, Utopia County Community College (UCCC). The task of the teach was to formulate strategies that UCCC could
follow over the next
five years, using the ED QUEST
process. The group included college presidents, deans and
institutional research/planners
in two-year institutions and state-level agencies from across the
United States and Canada. Each
participant was given a manual
that contained both a
description of each activity of tile process and an example of that activity's product. Overview
of ED QUEST The
session began with an
overview of ED QUEST, focusing on the primary activities of the process:
Identifying
Critical Trends and Events and the Nature of the Organization Because
the workshop was a brief one-day simulation of the actual process, the authors
made a representation of a notebook of future prospects with a slide presentation of driving social, economic, technological, and political trends in
American society.
Such information
is crucial in the process, as it defines the environmental
context within which the
college functions and identifies potential changes in that environment
for the future. UCCC's
simulated ED QUEST team next examined the college as it exists, in the
The
list of student/client needs to be satisfied by UCCC included:
The
nine programs and services the college provided to satisfy these needs are:
In
addition, a list of key indicators of institutional performance in areas
critical to its success and well-being was also prepared.
The indicators were measures of organizational attributes such as
effectiveness efficiency, competitive advantage or cost.
Key indicators used in the workshop were:
Finally, in order to expedite the task of defining the college in its current state, as list of institutional strengths and weaknesses was given to participants as a handout. This list consisted of the following strengths:
Weaknesses
listed were:
These
three
aspects of the college’s
current position (mission, indicators of performance,
and strengths/weaknesses) were
used later in the process to identify possible
changes that could occur
if the trends and future events identified by the team during their scan actually
materialized. A
brainstorming session was next
conducted to generate the trends and events the participants as members of UCCC's ED QUEST team believed would affect the future of UCCC. Specifically,
the
participants were asked to identify the trends
that, were they to materialize,
would have critical
importance to the college, and, the future events
they believed had a likelihood
of occurring over the next 10 years and,
if they did occur, would have
a significant impact upon the institution. The
following definitions were used to distinguish between trends and events:
The
team initially identified approximately twenty (20) items that formed a
master list of trends or events. After
all the items suggested were listed, team members discussed the significance of each item or its possible relationship to other
items that could describe
UCCC's future external environment. In some
instances, items were reworded to improve clarity or were combined into a new statement.
Identified trends and events
spanned all sectors of the external environment
(social, technological, economic, and
political). The preponderance
of items
dealt with demographic changes in American society, shifts in enrollment
patterns, changes in the structure
of the workforce, and the fiscal
and educational policy of state and federal governments. Once
the team had developed a master list of trends and events, the group was asked
to reexamine its respective initial list and, using a simple polling procedure of
its members, select the top five critical trends and the top ten impacting
events. The five critical trends selected were as follows:
Upon the completion of its tasks, the two groups were reconstituted into a committee of the whole to further refine the list of the top ten impacting events. All participants now were asked to give their individual assessments, of the probability that each of the ten selected events would occur during the planning time-frame of the exercise. From the list of ten, five events were selected as a majority of the members identified them as having a high (75 percent) to almost certain (95 percent or more) probability of occurring. The five events selected were as follows:
In
the final list, the critical trends and high impact/high probability events were
in the social, economic, political, and educational sectors of the environment.
Those trends and events in the social sector included the shift in
population from the frostbelt to the sunbelt (T-10) and the change in the racial
composition of America’s urban population (E-9)/Economic developments
identified by the teams were the occupational restructuring of the American
economy (T-1) and its effect on the workforce (E-5).
The reduction of the federal budget (E-1) and the increased activity of
special interest PACs (E-2) were two future political events that the team
selected as having significance for the future of UCCC. As
one might expect, by far the largest number of trends and events selected by the
team came from the environmental sector of education.
These included the continuing shift in two-year college enrollment
patterns toward more part-time students (T-4), increased demand for
accountability in higher education
(T-6), increased proportion of
college graduates over-qualified for available jobs (T-7) and mandatory exit
testing of college graduates (E-3). Analysis of Trends and Events Once
the critical trends and high impact/high probability events were selected, the
planning participants assessed the interrelationship between these events by
completing a cross-impact matrix. (In a typical QUEST process, the QUEST team
would also assess the impact of events on trends.
Because of the time limitation, this
was not done during the workshop.) Using
a grid designed for this purpose, each individual made an assessment based on a
scale of + 3 (greatly increased probability of the event's occurring) to - 3
(greatly decreased probability of the event's occurring). When completed, cross-impact assessments were given to the
facilitators who then tabulated the results. Two
events, the Gramm-Rudman budget and the social composition of U.S. cities, had
larger sums than the others. Those two
events represented major "actors" in the external environment and
would be reflected as such when writing scenarios.
Increased PAC spending and mandatory testing were greatly affected by the
other events, thereby indicating their sensitivity to these events.
The results of such analyses would also be used in the ED QUEST process
to develop scenarios. Once
the team completed the selection of critical trends and events, the team
identified the specific changes that the set of trends and events could have on
the college's mission and how they would affect the college's performance. This required the team to review the elements of UCCC's current
mission and to assess the implications of the trends and events as forecasted
for this mission; that is, would the forecasted trends and events acid to,
subtract from, or otherwise alter the client groups currently being served, the
needs being met and the services being provided. The results of the assessment for UCCC's programs were as follows: Present Programs/Services Element:
Future Program/Service Elements:
Another
important action for the planning team in this session was to assess the impact
of events and trends on the institution's key performance indicators.
Again, because of limitations of time, only the events were used in the
assessment process conducted during the workshop.
Using a series of " + " and " - " symbols, the
participants worked in two person teams that assessed the impact of one event on
each of ten indicators. The symbols used
were:
+ +
Greatly increases the level of the indicator
+
Increases the level of the indicator
0
No change in the level of the indicator
- Decreases
the level of the indicator
—
Greatly decreases the level of the indicator To
tabulate the results of the assessment, each
of the symbols was assigned the
following values: + + = 10, + = 4, 0 = 0, -
= - 4, and - - = - 10. The results
were then summed without regard to sign. The
results of
the assessment showed that
E-5 would have a strong position impact on many
of the key performance
indicators of UCCC. In addition, five of
the indicators (i.e., technical education enrollment, continuing education enrollment,
retention rate, local funds, and expenditures) were positively influenced
by the set of five events.
This becomes important in assessing and understanding the
potential impact of these events on
the organization's future performance. Developing
Alternative Scenarios Because
of the lack of time, the participants did not
have an opportunity to use the
information to develop a series of scenarios. In
a normal ED QUEST process, this would be an important activity.
Scenarios allow the ED QUEST team to incorporate their assessments of the
changes into alternate states of the future
that the college would face.
These scenarios then become the
basis for assessing their implicated effect on the institution and for
developing the alternative strategic options the college would consider for
possible adoption. Developing/Selecting
Strategic Options The last activity of the process was to develop the strategic options based on a set of scenarios. Using scenarios that had previously been prepared by the authors for UCCC, the participants were divided into two groups. Each group analyzed one of two scenarios, one entitled, "The Neoclassic Future," and the other one, "The Technological Imperative." The task of analysis was to identify what implications that particular alternative future would hold for UCCC, should it occur. A series of implications that one group developed for their scenario were as follows:
Using
those implications as a basis, each
group then developed a set of four
strategic options. These options
represented strategies that the college could possibly use to position itself in the alternate
future depicted in the scenario, should
it occur.
Once
the strategic options
were developed, the groups
used an impact matrix grid to assess the
impact of each option on the
previously identified strengths and
weaknesses of the college. A scale of +5 (greatly
enhanced) to a -5 (greatly reduced) was used in making this assessment.
A strategic option matrix was
developed for the
assessment of the strategic options on the
set of five strengths. A similar
matrix was developed for
assessing the impact of the strategies on the set of five weaknesses.
Once each matrix was completed, the values
of its cells were algebraically
summed for each row. This sum represented
the
overall impact of a
particular strategic option on all strengths (or weaknesses).
Thus, each strategic option had two scores, one representing the sum
of its impact on all strengths
and one representing
the sum of its impact on all weaknesses. Using the scores for each strategic option, the group then selected the optional strategies for inclusion into the college's strategic plan. Those options whose impact on the college's strengths were represented by positive scores and whose impact on the college’s weaknesses were represented by negative scores were considered good candidates for eventual implementation. The following options were selected as meeting this selection criterion:
Conclusion The
purpose of the workshop was to
demonstrate how a process such as
ED QUEST could link information developed from an environmental scanning and
forecasting process to the
formulation of institutional strategy by the senior
administration and planning team of a two-year college. It is imperative that two-year institutions, like other institutions in our society, have the capacity to anticipate societal developments and emerging external forces that will affect the nature and quality of their programs. This implies that institution,, should develop the ability of foresight, so that they can accomplish their mission, ED QUEST is a process that anticipates environmental changes applicable to a specific institution and that suggests constructive strategies for that institution's strategic management. References Aguilar,
F. J. (1967). Scanning
the business environment. New York,
New York: Macmillan. Anderson,
C. R. & Paine, F. T. (1975). Managerial
perceptions and strategic behavior. Academy
of Management Journal, 18, 811-823. Boulton,
W. R., Lindsay, W. M., Franklin, S. G. & Rue, L. W. (1982).
Strategic planning: Bourgeois,
L. J. (1980). Strategy and environment: A
conceptual integration. Academy of
Management Review, 5, 25-39. Cope,
R. G. (1978). Strategic policy planning; A
guile for college and university administration. Littleton, Colorado: The Ireland Corporation. Dube,
C. S. & Brown, A. W. (1983). Strategy
assessment: A rational response to university cutbacks.
Long-Range Planning, Duncan,
R. B. (1 975). The complexity of
organizational environment and perceived uncertainty.
Administrative Quarterly Review,
17, 527-533. Hall,
R. H. (1977).
Organizations: Structure and process.
Englewood Cliffs, New Jersey: Pretitice-Hall, Inc. Kast,
F. L. and Rosenzweig, J. (1979).
Organization and management: A systems approach.
New York: McGraw-Hill. Klein,
H. E. and Newman, W. H. (1980). How to
integrate new environmental forces into strategic planning. Management Review, 19,
40-48. Lindsay,
W. M. & Rue, L. W. (1980). Impact of the organization's environment on the
long-range planning process: A contingency view. Academy of Management
Journal, 23, 385-404. Mecca,
T. V. & Adams, C. F. (1982). ED
QUEST: An environmental scanning process of educational agencies.
World Future Society Bulletin, 16, 7-12. Morrison,
J. L., Renfro, W. L. & Boucher, W. I. (1984).
Futures research and the strategic
planning process: Implications for higher education.
Washington, D.C.: American Association for Higher Education. Terry,
P. T. (1977). Mechanisms for environmental scanning. Long-Range Planning, 13,
20-25. Zeigler,
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Syracuse, New York: Syracuse University Research Corporation,
Educational Policy Research Center.
Thomas
V. Mecca is Vice President
for Planning and Development, Piedmont Technical College, in Greenwood, South
Carolina. James
L. Morrison
is Professor of Education, University of North Carolina at Chapel Hill.
North Carolina.
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