analysing internal environment
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Successful leadership actions to improve organisations
We look at activities that leaders must regularly undertake in order to ensure the success of their organisations.
Analysing the operating environments:
Ensuring successful analysis:
Analysing the operating environments on a regular basis, and additionally when major changes occur; using legal and ethical means to gather information; using experienced specialists to gather and analyse the information; using an appropriate range of information gathering tools and techniques; gathering information from an appropriate range of sources; ensuring that forecasts, trends, predictions, are supported by sufficient evidence. The objective is to carry out an analysis that provides the organisation with a clear picture of the current environment in which it operates, and a forecast of impending changes. This will enable the leaders of the organisation to make changes to existing operational objectives in response to the findings on the current situation, and to longer term plans in preparation for the predicted changes. A thorough analysis should be carried out at least annually, with quarterly reviews. This will ensure that the leaders of the organisation are fully informed at all times, and are equipped with information that will enable them to respond appropriately to any changes which impact on the organisation.
1. Analysing the external environment:
Identifying the components and the boundaries of the external environment in which the organisation operates; considering the current political, economic, social, technological, and environmental situation; gathering appropriate, sufficient, reliable, and valid information; identifying and evaluating trends; evaluating the impact of current influences on the organisation; forecasting the impact of potential changes on the organisation. The objective here is to gather information which highlights or predicts changes in the world in which the organisation operates. There are many thousands of local and international influences and forces which impact on the organisation. Indicative examples include demographic changes, cultural changes, and social behaviour changes, all of which can lead to changes in customer markets and buying patterns. Another example is a potential or forecast change in a technology which could end demand for certain products or services. For almost any organisation, of any size, and in any sector, gathering and analysing this type of information is critical.
2. Evaluating competitor behaviour:
Identifying current and potential competitor organisations; gathering appropriate information on current and forecast competitor activity; evaluating the strengths and weaknesses of individual current competitors; considering the potential impact of new entrants or changes in competitor behaviour. The purpose of this is straightforward. Competitors are, by default, competing for the same customers, and if they are worthy competitors, they will be carrying out the same type of analytical activity, and responding to their findings. Competitor activity can be a vital component of the information gathered, as it indicates how similar organisations are responding to current and forecast changes.
3. Considering the needs of stakeholders:
Identifying all stakeholders, within and outside the organisation; evaluating the importance of support from each stakeholder group; consulting with stakeholders to identify and understand their needs; explaining to stakeholders the organisation’s strategies and values; resolving conflicts and misunderstandings through discussion. The aim of this activity is to ensure that the needs of the stakeholders are known, and their views taken into consideration. Stakeholders can include operational staff, managers, trade unions, shareholders, suppliers, customers, clients, sponsors, funding organisations, partner organisations, local government departments, and local or national media. There can also be sector-specific stakeholders, such as relatives of patients, in the hospital sector, local residents affected by major construction projects, or parents of schoolchildren.
4. Evaluate the internal condition of the organisation:
Analysing the organisation’s current internal condition; carrying out a review of strengths, weaknesses, opportunities, and threats. The aim is to build a detailed picture of the current condition of the organisation, in terms of its internal health. This should be comprehensive, looking at all internal aspects of the organisation, including for example, the physical location(s) in which it operates, condition of buildings, equipment, vehicles, plant, funding, operational performance, recruitment, retention, training and development, policies, procedures, products, services and so on.
5. Adjusting current strategies:
Considering the findings of the analysis activities, and then evaluating current strategies and direction against these; consulting with specialists and key stakeholders about the proposed changes; adjusting current strategies and strategic objectives or replacing them with new ones; implementing a management system that will monitor, control, and adjust where necessary, the new strategies. The objective here is clear. To survive, the organisation must have in place appropriate strategies. Unless strategic direction, specific strategies, and their related objectives, are regularly evaluated, maintained and adjusted, the ability to compete will deteriorate and eventually the organisation will fail.6.
6. Adjusting systems and structures:
Evaluating the appropriateness of the current systems and structures in meeting the demands of the new strategies; consulting with all affected stakeholders on proposed changes; planning and implementing changes to operational, quality, and cultural systems, policies, procedures, and structures; implementing procedures to monitor, control, and adjust these as necessary. The purpose of this is to put in place an appropriate infrastructure that will support the new strategic and operational objectives. Unless this infrastructure is compatible with, and supports the achievement of, these objectives, the strategies will run into difficulties and almost certainly fail.
7. Adjusting current operational objectives:
Adjusting operational objectives and activity in response to the changes in strategic direction; implementing an appropriate quality assurance management system to maintain operational quality standards; implementing procedures to monitor, control, and adjust operational activity and objectives as necessary. Operational activity must support and help achieve the strategic objectives. It is extremely damaging, if not fatal, to allow operational activity to continue unchanged, when the strategic direction and objectives of the organisation have changed.
8. Adjusting personnel capabilities:
Comparing the current and potential performance capability of key individuals and teams against the forecast performance requirements; improving personnel capability by re-training and development where appropriate; replacing individuals and teams where necessary; implementing an individual and team appraisal and development system. The aim of this activity is to ensure that, at all levels, the best possible individuals and teams are in place to support and help achieve the organisation’s goals. Without the right people the strategies will fail.
Analysing the environment in which the organisation operates is the most critically important activity that the organisation’s leaders undertake. It represents the sole purpose of the leaders, that is to ensure that the organisation is taking the most appropriate strategic direction and is equipped with the optimum resources needed to be successful in achieving its objectives. High quality information is critical to the success of the organisation, and information about the changes and challenges facing the organisation in the future is the most valuable of all.
Strategic planning is regarded as a scientifically researched technique or tool, to enhance leadership competencies. The strategic planning technique, with its SWOT analysis, can also work for improvement of a subsidiary, department, section or even single career planning by individuals. See our leadership development training modules for members here on this page.