chartered institute of housing north west conference 24 march 2010
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Chartered Institute of HousingNorth West Conference
24 March 2010
What’s going on out there? Why environmental scanning is important in planning our
future.
Kim Penfold
Consultant
Penfold Associates – who we are and what we do
• Housing• Planning• Regeneration
What is it all about?“Environmental scanning in a strategic sense
is about building a global context for your work, your organization, your competitive
environment, and your industry. It is about recognising that the future is unlikely to be
anything like the past, and that we therefore need to spend some time understanding the trends and likely influencers on the future of our organizations. High quality scanning is
the core of effective futures work”.
Maree Conway (2009)
A simple definition
“Careful monitoring of a firm’s internal and external environments for detecting early
signs of opportunities and threats that may influence its current and future plans. In comparison ‘surveillance’ is confined to a
specific objective or narrow sector.” (www.businessdictionary.com)
Approaches to scanning
• Ad-hoc – unstructured• Regular – perhaps linked to planning
cycle• Continuous• IMPORTANT – need structure and
purpose to be systematic
Terminology
• Event or scanning “hit”• Trend – suggests a pattern of change• Driver of change – broad in scope and
long term• World view – how you see the world
BUT beware because it influences what you ignore!
Aims of environmental scanning
• Identify the relevant information for you– Trends – generally known about– Weak signals – on the horizon – harder to spot
• Avoid surprises– Risk aware, not risk averse– Can then manage risk
• A written report– Reality check– Words make an audit trail
• Respond, rather than just react
Process
• Input – information gathering• Analysis – what does it mean?• Interpretation – how does it affect you?• Prospection – what might happen?
(could develop scenarios)
Feeds into planning - SWOT
• Strengths – mainly internal• Weaknesses – mainly internal• Opportunities – mainly external• Threats – mainly external
Time-frame
• At least 5 – 10 years• Don’t be afraid to go further• BUT, heavy political influence points to
rapid short term change
Assessing relevance of trends• Scoring system
– Time-frame– Scope– Impact– Likelihood– Urgency
• Responses – act now, manage or watch• Beware counter-trends• Beware “wild cards” high impact/low probability
Simple techniques
• PEST• STEEP• PESTLE• Help gather data• Help organize data
PEST
• Politics• Economy• Social• Technology
STEEP (or PEEST)
• Social• Technology• Economics• Environmental• Politics
PESTLE
• Politics• Economy• Social• Technology• Legal• Environmental
Does it work? Could it have predicted...?
• US sub-prime crisis• UK house price collapse• Credit crunch• World recession
“The Times” – ten people who predicted financial meltdown
• Vince Cable MP – UK personal debt• Christopher Ward (broker) – sub-prime• www.stock-market-crash.net• Henry Weingarten – astrologer• Nouriel Roubini (Dr Doom) – sub-prime• Nikolai Koudriatev (d.1938)• www.housepricecrash.co.uk (2003)• Lord Oakeshott – Icelandic banks• Stephen Roach – “economic Armageddon” (2004)• Ron Paul, Republican (2003)
Gordon Brown
“I called for global financial reform ten years ago.”
The signs were ignored – hubris!
• Neo-classical economists (Chicago)– Retreat from Keynes– More monetarist than Friedman
• Deregulation both sides of the Atlantic• Ignored lessons of past• Ignored sub-prime and housing bubble in US• Some economists spotted it – Robert Shiller, Dean
Baker, Raghuram Rajan, Paul Krugman – cried in the wilderness!
We all knew, of course!
• Excessive personal debt• High loan to income ratios• Self-certified mortgages• Marginal owner-occupation• We’d seen it all before!• What did we do about it?
PEST exercise
Politics
• General Election• “Hung” Parliament?• New Government/Ministerial team• National housing policy – targets?• Public spending priorities• Regional structures/plans• HCA priorities/working methods
Politics (2)
• Regulatory approach – TSA/AC• Sub-regional/cross authority working• Local authority policies, priorities,
resources• Environmental policy
Economy
• Pace/nature of world and UK recovery• Public debt issue• Housing market performance
– House prices– Rental demand
• Access to borrowing• Condition of sector - mergers
Economy (2)
• Unemployment/jobs market• Making regeneration work
– Stalled projects– New delivery models
Social• Demographics
– Ageing population– Migration
• Changing housing aspirations• Changing lifestyle aspirations• Deprivation
– Health– Education/skills– jobs
Social (2)
• Crime and anti-social behaviour• Community cohesion• Neighbourhood issues• Changing attitudes to work• Public attitude to environmental issues
Technology
• Workplace technology• Customer access to technology and
skills• Construction technology• Environmental technologies• Broader technological impacts
Conclusions
• Environmental scanning is essential• Must be systematic - regular and
continuous• Feed into planning process• Techniques are simple – no excuses!• Apply judgement – respond not react• Write up the results
Contact details
www.penfoldassociates.co.uk