Why Environmental Scanning Works Except When You Need It
Why Environmental Scanning Works Except When You Need It
Why Environmental Scanning Works Except When You Need It
BH104
Why environmental
scanning works except
when you need it
Brian J. Huffman
W
Environmental scanning
systems are useless in the face
The Titanic sank because of facts that its slightly post-Victorian crew were simply not equipped to see. They lived
during a time in which technological changes came at a
furiously unprecedented rate. Victorian optimism combined with new and unfamiliar technology led to spectacular, technologically driven disasters even before the
Titanics sinking. That optimism was manifest in Titanics
defective hull rivets, in its watertight compartments
which were open on top, in its radio operator who was
annoyed by ice warnings coming from other ships, and in
its lack of sufficient lifeboats.
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What is a strategic
inflection point?
Why didnt you come home before?
Why didnt I go to China? Some things you do, some
things you dont.
Keith Andes (fisherman Joe Doyle) to Barbara Stanwyck (his sister) in Clash by Night
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What is an asymmetric
attack?
My, my. Such a lot of guns around town and so few
brains.
Humphrey Bogart (private eye Philip
Marlowe) in The Big Sleep
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the disjointed (unsynthesized) data provided by the environmental scanning system should have been enough to
warn leaders. Disasters are seen as having been inevitable,
predictable, and (of course) avoidable. The press and FBI
whistleblower Colleen Rawley tell us the FBI should have
been able to assemble the bits of information it had prior
to 9/11 to prevent that disaster. They are kidding themselves; unlikely connections only look likely in hindsight.
James Burke (2003) of Connections fame found a connection between the 1804 attack on Tripoli and the invention of fish sticks; he was able to make even that ridiculously unlikely connection look plausible.
An experiment described by Fischhoff (1975) illustrates
the point. Subjects in three groups were told about a battle between the British and the Nepalese Gurkhas in 1814.
All three groups were truthfully apprised of the conditions
prior to the battle, but each group was given a different
outcome. The first group was told that the British won,
the second that the Gurkhas won, and the third that the
battle ended in a tie. Members of each group said that
given the conditions before the battle (the data), they
would have judged the outcome they heard as most likely
even if they had not been told what happened. So much
for 20/20 hindsight.
Moreover, according to Kahneman and Tversky (1982),
the easier it is for subjects to imagine an alternative ending, the more they will tend to believe that what did happen could have been avoided. Wall-to-wall news coverage
after the first space shuttle disaster gave the armchair
quarterbacks enough facts to make that accident seem
almost the result of criminal negligence. However, the
definitive Challenger disaster study by Vaughan (1996)
made it clear that the explosion was not foreseeable.
n order to better appreciate the problems environmental scanning systems have with strategic inflection
points, we first need to step back and consider how
such systems are supposed to work. According to Thompson and Strickland (1998), environmental scanning
involves studying and interpreting the sweep of social,
political, economic, ecological, and technological events
in an effort to spot budding trends and conditions that
could become driving forces. Those authors dampen
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Problems with
environmental scanning
What do you want, Joe, my life history? Here it is in
four words: big ideas, small results.
Barbara Stanwyck (Mae Doyle) to Keith Andes
(her brother Joe) in Clash by Night
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ately huge overheads, could have gone bankrupt in minutes. Microsoft stayed afloat because software did not
migrate to the Web in any substantial way. Moreover, as
Gates puts it, his company was never as clueless as the
press seemed to think it was. But that strategic inflection
point and accompanying asymmetric threats might have
caught Microsoft sleeping if it had relied exclusively on
top management, professional strategists, or environmental scanning systems to warn it. As Gates modestly admitted, the impetus for Microsofts response to the Internet
didnt come from me or from our other senior executives.
It came from a small number of dedicated [operatinglevel] employees who saw events unfolding.
By 1995, operating employees at Microsoft had already
begun to have bad feelings about the Net; their intuitiondriven fears were the product of the day-to-day grind of
running the business. Steven Sinofsky, for example, had a
wake-up call when he was stuck at Cornell University in a
snowstorm during a recruiting trip and just happened to
see how the Net had become a normal part of the Cornell
students everyday life. He was shocked to observe students already living what Gates later called the Internet
lifestyle. A top executive or dedicated corporate planner
would not have been on a recruiting trip in the first place,
but even if one had, it is unlikely he would have had the
right intuition to appreciate the danger in what was going
on at Cornell.
While anyone might agree that dedicated corporate planners may be too far out of touch to make sense of data
from environmental scanning systems, it is harder to
believe that top management would not be able to put
together the right picture. Indeed, Harvard Business professors Watkins and Bazerman (2003) actually recommend that corporate management play the role of synthesizer. But then, they hedge, the barriers to this happening
are great.Those at the top inevitably receive incomplete
and distorted data. Thats exactly what happened in the
months and years leading up to September 11. These
authors seem to want it both ways, finding crisis predictable but still inevitable (their word) due to a lack of
synthesis caused by the existence of organizational silos.
In other words, top management should synthesize
except that it cant.
Top executives would probably like to believe Watkins and
Bazerman since they would be understandably reluctant to
face the fact that the fate of their company is not entirely
(or perhaps even primarily) in their hands. Indeed, Mintzberg believes that company leaders continue to pursue the
holy grail of formalized strategic systems because they
would rather not rely on the idiosyncrasies of human intuition, especially when that intuition is not their own. Still,
as the Sinofsky case demonstrates, top managers are stuck
with relying on human intuition and even dumb luck
what if it hadnt snowed in Ithaca?
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Forsyth, Frederick. 2002. Your spies could be more like our spies.
Wall Street Journal (12 December): A18.
Gates, William. 1999. Business @ the speed of thought. New York:
Warner Books.
Gold, Philip. 2002. Against all terrors: This peoples next defense.
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Goldman, Steven L., Roger N. Nagel, and Kenneth Preiss. 1995.
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the customer. New York: Van Nostrand Reinhold.
Grove, Andrew S. 1996. Only the paranoid survive. New York:
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Kahneman, Daniel, and Amos Tversky. 1982. The psychology of
preferences. Scientific American 246: 161-173.
Metz, Steven, and Douglas V. Johnson II. 2001. Asymmetry and
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concepts. White paper, US Army War College, Strategic Studies
Institute. @ carlisle-www.army.mil (January).
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excellence. New York: Warner Books.
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management: Concepts and cases. Boston: Irwin McGraw-Hill,
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Thompson, Peggy, and Saeko Usukawa. 1995. Hard boiled: Great
lines from classic noir films. San Francisco: Chronicle Books.
Vaughan, Diane. 1996. The Challenger launch decision: Risky technology, culture, and deviance at NASA. Chicago: University of
Chicago Press.
Watkins, Michael D., and Max H. Bazerman. 2003. Predictable
surprises: The disasters you should have seen coming. Harvard
Business Review 81/3 (March): 72-80.
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