Situation and Environment Analysis

Practical Implementation/Situation and Environment Analysis

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Analysis and Evaluation - Step 1

SITUATION ANALYSIS: CURRENT CHALLENGES

The first step in situation analysis should be to identify and assess the major challenges being faced by the company. It is important to formulate the question as fundamentally as possible and to focus less on individual projects or measures. The goal is to identify the issues that will, by far, have the greatest impact on the company in the coming years in terms of competitive position, growth and earnings. Then, for each of these challenges, the need for prerequisites that have to be created should be assessed. This can be done using a simple percentage scale and then considering the order of importance of each challenge. This creates an initial ranking of the most significant issues with the obvious greatest need for action.

SITUATION ANALYSIS: CURRENT MOOD

The second step of this situation analysis is to record and assess the mood in the workforce and other stakeholders. For example, the following questions should be answered:

Is staff turnover at a good level?
Does the company have good employee evaluations on an average?
Is the success rate in recruitment sufficiently high?
Is the rate of absenteeism and the number of sick days within an acceptable range?
Are there frequent disputes in the organisation?
Is there satisfaction with the commitment of the workforce?
Do employees express their motivation without being asked?
Are there a remarkable number of customer complaints or claims?
Do many employees feel overburdened, hung up about something or under-challenged?
Are there atmospheric disturbances in the management?
Are there demands for strategy, focus and commitment?

It is advisable for the top management not to conduct the situation analysis alone but to involve suitable individuals from the company, so that subjective perceptions and limitations are put into perspective as much as possible. In addition, it is advisable to document the results in a suitable form, so that a subsequent evaluation can be carried out effectively and objectively.

ENVIRONMENT ANALYSIS: CURRENT CHALLENGES

In addition to the situation analysis, the current challenges arising from the company's environment should be analysed too. It is important not to focus on individual effects or processes but on issues of higher importance for a relevant part of the company and its success. Similar to the situation analysis, the 'gaps' between the requirement and the actual situation should also be assessed for each point included. The environment analysis can be carried out in the following groups, for example:

Market and customers (competition, existing and potential customers).
Suppliers and labour market (resources, talents, supply).
Owners and investors (capital, liquidity, conditions).
Government and regulators (laws, standards, proofs).

SUMMARY

The results of the situation and environment analysis should eventually produce a list of the most significant challenges, with an assessment of the greatest backlog. After the results are available, one of the first training sessions could take place. In this, all results that do not fall within the scope of Enterneering^® but concern processes, systems, projects or products should be delegated as effectively as possible. This is especially important in larger and more complex company organisations. After all, who will organise the further development of a complex company if the people with overall entrepreneurial responsibility spend their time on individual processes, systems, projects or products? While this may sound logical, it is very often not the case in actual corporate practice.

☝ Use the exercise session with the 'RADAR tool for Situation and Environment Analysis' linked below.