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Board of Directors Environment Scanning Process
Environmental scanning is an objective review of the current and anticipated environmental factors that impact an organization. These include political, economic and demographic environments but also encapsulate other areas, including the regulatory environment, funding trends, and competitor activities. As part of our commitment to maintaining the value of CARA membership and to ensuring the longevity of the Association, we undertake a biannual review of both CARA’s strategic and operational landscapes, scanning the horizon for challenges and opportunities, and informing our understanding of the broader context in which we govern and manage CARA on behalf of the members. This document maps the process we follow to ensure routine and robust assessments of CARA’s internal and external environments.
A general objective of environmental scanning is to capture, share and integrate relevant and valid knowledge about the Association and its environment to facilitate informed decision-making at all levels. Specific objectives include:
On a biannual basis, the findings of our scanning inform or affirm our operational decision-making, continually testing our assumptions and supporting our actions. The environmental scan is also used as part of our annual appraisal of the Strategic Plan, helping to ensure our objectives remain relevant and that our targets are SMART.
An environmental scan is usually limited to looking at current or future issues. It does not attempt historical analysis or the searching out of all possible information on a subject. The scan identifies and examines current trends in order to explore their implications for the future. In conducting a scan, we look within the organization, to other organizations in the sector and profession, and to our overall business environment, identifying trends and conditions that may give rise to issues requiring the Board’s attention.
Routine environmental scanning naturally occurs within CARA, albeit tacitly, as both staff and the Board go about their business. For example, staff who are at the interface with the membership, sister associations, suppliers, etc. are well-placed to detect changes and trends in their immediate environment and instinctively feed this information into decision-making processes. However, routine, tacit scanning by itself does not meet the needs of effective strategic planning and those of a responsive organization. A more systematic approach is necessary, and the keys to our successful environmental scanning are the active and open exploration of CARA’s communities, incorporating diverse sources of information and different viewpoints. Therefore, led by the Association’s Vice President, a sub-committee of the Board of Directors is tasked with managing the formal process of environmental scanning, convening biannually to prepare a report for the Board of Directors to consider and respond to by adjusting strategies and activities accordingly.
During the year, the ES Sub-Committee is formally tasked with observing external and internal factors that influence CARA’s environment and bringing these together for the Board to consider, but in practice all Directors and staff members adopt the habit of horizon scanning, regularly feeding their observations into the ES Sub-Committee. As part of that process, colleagues consider the following in their observations:
Colleagues’ observations are fed into the ES Sub-Committee’s formal systematic approach to environmental scanning, which broadly follows a 7-step process:
Step 1 - Confirm the scanning type
There are two fundamental scanning types: social intuitive and formal analytical. Social intuitive is a less rigorous type of scanning: The term acknowledges the fact that everyone scans their environment for useful information about what is on the horizon. For CARA’s purposes, we use the formal analytical process whereby people investigate a wide range of sources and then produce a report by a given date. Some people are much better at social-intuitive scanning than others; research indicates that founders of successful startup ventures, for example are adept at social-intuitive scanning. They do a lot of networking and are naturally inclined to ask questions and generate opinions on what the future holds. Similarly, people who use social media are trafficking the kind of information that lends itself to social-intuitive scanning. Formal analytical scanning is a means of bringing discipline, range, and conclusions to a social-intuitive inclination. It is, therefore, crucial to have the correct people, equipped with the appropriate skillset leading on the Association’s environmental scanning.
Further, our use of the formal analytical approach enforces the use of both viewing and directed modes of environmental scanning: One approach is to conduct an unrestricted search of the entire environment. In this viewing mode, the scanner is open to anything that could be relevant to the organization, though the scanner is especially attentive to broad subject categories that are thought to offer the best opportunities. One such viewing scheme goes by the acronym STEEP, referring to trends in the social, technological, economic, environmental (i.e. ecological), and political spheres. Another approach, the directed mode, relates to specific trends an organization is already aware of. Here the goal is to learn more about how a trend will affect its industry or profession. For example, in directed mode, the scanner drills down to discover the implications of a trend for suppliers, competitors, customers, and downstream beneficiaries. It's important to remember that no organization operates exclusively in viewing or directing mode and CARA’s formal scanning process engages in both simultaneously, at once identifying newly relevant trends and performing in-depth research on those already believed to be the most significant. Membership of the ES Sub-Committee reflects these requirements.
Step 2 - Identify the members of the ES Sub-Committee
Led by the Vice President, the ES Sub-Committee comprises the appropriate skillset to deliver both social intuitive and formal analytical scanning, in both viewing and direct modes. In addition to the Vice President and the Executive Director, the Board of Directors nominates five colleagues to participate on an annual basis. These are drawn from amongst the Directors or are co-opted from outside the Board, and key personal attributes that correlate with scanning proficiency include:
Step 3 - Identify priority environmental factors
The key environmental factors to be considered by the ES Sub-Committee as part of the environmental scan largely reflect the context of the strategic plan and the corresponding internal and external working environments. These are listed in Annex A.
Step 4 - Identify primary information sources
Primary information sources are media that offer productive and reliable insights over time. CARA is continually reviewing and developing its catalog of sources, including those that offer a single but important piece of information, and secondary sources that are checked periodically. Our sources include print and electronic news, live events where members gather, and social media outlets where member-related information is transferred.
Step 5 - Scan and collate data
Individually we use a combination of scanning methods, informed by the social intuitive and formal analytical approaches, and viewing and directed modes but collectively, the ES Sub-Committee uses the following techniques to capture and collate data:
Step 6 - Prepare “ready to use” scanning information
Whilst pages of prose can go into explaining an implication drawn from a trend, brevity is key and therefore each strategic issue identified by the CARA ES Sub-Committee is distilled into a single paragraph. The objective is to describe the cause-and-effect scenario to which the Board must respond. Whatever the Board decides is contained in a strategy; and the reason to something at all is a strategic issue. The ES- Sub-Committee does not provide recommendations on responsive actions. That is the role of the Board of Directors in their capacity as CARA’s strategy makers, which they will do if they agree that the issue warrants a response. The number-one failure point in problem-solving arises when nobody can agree on the motive to act before launching an action. Critically, separating the roles and responsibilities of the ES Sub-Committee and the Board of Directors creates a firewall between the stimulus (issue) and the response (the strategy) and therefore promotes a far more efficient and creative decision-making process.
Step 7 - Respond
When developing a response to a strategic issue, the Board of Directors considers three (and only three) response options but explores each in-depth:
The value of this three-option framework is itself threefold: it forces the Board to agree on the need to act before it considers possible actions (if it does not agree on the motive, the Board is not likely to agree on a strategy); secondly, it provides an analytical format to explore a full spectrum of strategic options; and finally, it helps to ensure that the ES Sub-Committee’s findings are used properly by the Board of Directors.
CARA recognizes that as more members of the Association are exposed to environmental scanning systems through their own work, they expect their professional body to adopt best practices and pursue environmental scanning as well, enhancing the quality of decision-making and ultimately improving the quality of membership services and support. Indeed, recognizing that often the Association and its members’ organizations face the same or similar issues, the findings of CARA’s environmental scanning are routinely offered as a source of information for members’ own scanning efforts, thus making CARA’s environmental scanning both a highly effective administrative tool for the Association and a valuable service to its members.
STEP 3: IDENTIFY PRIORITY ENVIRONMENTAL FACTORS
Internal Environmental Factors
Value system: The value system of the Association and those of the Board of Directors has an important bearing on the mission and objectives of the organization, Association policies, and practices. It is widely acknowledged that the extent to which the value system is shared by all in the organization is an important factor contributing to success.
Mission and objectives: The sphere of the Association’s activity, priorities, the direction of development, organizational philosophy and policy, etc. is guided by the mission and objectives of the company.
Governance and management structures and natures: The organizational structure, the composition of the Board of Directors, the extent of professionalization of management, etc. are important factors influencing decision-making.
Internal power relationships: Factors like the amount of support the Executive Director enjoys from staff, CARA members and the Board of Directors are an important influence on decisions and their implementation. The relationship between the members of the Board of Directors is also a critical factor.
Human resources: The characteristics of human resources like skill, quality, morale, commitment, attitudes, etc. could contribute to the strength or weakness of CARA.
CARA image, reputation and brand equity: The image and reputation of the Association matters, particularly in terms of membership recruitment and retention, but also in terms of forming joint ventures or other alliances, entering purchase or sale contracts, launching new membership products or service, etc. Brand equity is also relevant in several of these cases.
Technological capabilities: CARA’s main membership interface is online. If it is inadequate, is CARA able to innovate and compete?
Marketing resources: A key factor in membership recruitment and retention is the quality and distribution of CARA’s marketing and promotion.
Financial: An obvious but often overlooked factor is the financial capabilities of an organization, i.e. not simply money in the bank but features like financial strategy and policies, financial position, and capital structure are also important in affecting Association performance, strategies and decisions.
External Environmental Factors
The external environment consists of no fewer than three types of setting: micro, macro, and mega environments:
Micro Environment: This consists of the actors in the Association’s immediate environment who affect the performance of the Association. These include but are not limited to:
those who compete for the discretionary income of the membership, such as the AUTM, CARL, CAREB, and the AURP;
Macro Environment: This consists of the larger societal forces that affect all the actors in the Association’s microenvironment:
Mega Environment: This mainly consists of the international environment. Given CARA’s operating links with sister associations, such as ARMA in the UK and SRAI in the USA, plus its leading role within the INORMS community, CARA must remain cognisant of international developments and opportunities.
PESTLE Analysis Template
PESTLE Analysis is a useful tool for understanding the “big picture” of the external environment in which CARA navigates. PESTLE involves identifying the political, economic, social (cultural), technological, legal and environmental influences on the Association.
PESTLE is useful before SWOT (see below), although not generally the other way around. PESTLE helps to identify SWOT factors and the advantage of this tool is that it encourages the Board into proactive and structured thinking in its decision-making.
SWOT Analysis Template
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of an organization. In relation to environmental scanning, its use involves specifying the event, trend, issue or expectation, identifying the internal and external factors that are favorable or unfavourable to CARA’s ability to respond to that occurrence and mapping these across a SWOT Matrix.
Strengths and Weaknesses (SW): internal value-creating or destroying factors, such as assets, skills, resources, etc, can be measured by using internal assessment or by external benchmarking.
Opportunities and Threats (OT): external value-creating or destroying factors, outwith CARA’s direct control but emerge from either the competitive dynamistic of the sector or from demographic, political, technical, social, legal and/or cultural factors.
The relationships in a SWOT analysis are generally represented by a 2x2 matrix. Strengths and Opportunities are both positive considerations. Weakness and Threats are both negative considerations. The Board of Directors can use the outcomes of the ES Sub-Committee’s SWOT analysis to inform its decision-making on appropriate responses. Ultimately the Board should attempt to build its strength, reverse its weakness, maximize its response to opportunity, and overcome its threats.
In the event of inconsistency between the French and English versions, the English language version shall prevail.
Approved by the CARA Executive Board: 6 May 2017