Keeping a Look Out!
Watch out! There’s stuff going on out there that can make or break your business. It’s a rapidly changing world and the changes taking place are outside our direct control – changes in technology, economics and regulations for example. Such changes in the ‘external environment’ can have dramatic effects on businesses and organisations, indeed on whole industries. Mobile phones have altered the way we communicate in the last few years; the internet has opened up global markets.
Using a Business ‘Radar’
To stay ahead of the game we need to anticipate changes, not just react to them. This requires constant ‘scanning’ of the external environment and I liken this to a ship’s radar, constantly looking out for both hazards and help, picking up on its radar screens approaching ships and impending storms in good time. Naturally, we are in touch with the world we live in and we constantly learn about new developments from TV, friends, publications and a host of other sources. But to have an effective 360 degree radar, it pays to be more systematic in scanning for opportunities – and threats. This scanning can be called an External Audit (or Environmental Analysis).
The ICEDRIPS checklist enables you to devise your business radar as an early warning system to avoid or defend against threats whilst identifying emerging opportunities before your competitors do.
The ICEDRIPS Checklist
The ‘ICEDRIPS’ checklist below, lists eight different directions from which external factors can approach:
Innovation
Competitors
Economics
Demographics
Regulations
Infrastructure
Partners
Social Trends.
The best way to use this checklist is first to ‘brainstorm’ and list everything that is happening in the world under each of the headings, without analysing or discussing them. Then go back to find which factors might be opportunities or threats for your own enterprise.
What to do next
Assess the external environment using each of the eight headings to identify things going on in the world out there – or likely to happen soon.
Innovations include computer technology and the internet (of course) but other developments in the biosciences and transportation.
Competition. List your closest competitors.
Economics includes factors such as inflation, exchange rates, downturns in the industry, public spending etc.
Demographics include the ageing of the population, migration, trends in employment, social class etc,
Regulations such as new laws, protocols, agreements and conventions.
Infrastructure such as telecommunications networks, transport, public services and utilities.
Partners. Formal or informal partnerships, joint projects or strategic alliances with other companies or organisations
Social trends, including acceptance of technology, use of leisure time, fashions and changing beliefs.