Mapping out issues management.
Before Croesus went to battle with Cyrus, the King of the Persians, he consulted the oracle at Delphi. Croesus learned that a great empire would fall as a result of the battle, and he exulted in the anticipation of his triumph. Not surprisingly, the oracle had "hedged her bets" and it was Croesus, not Cyrus, who lost his power. Croesus might have changed his strategy had he learned that it was his empire that would be vanquished.
In our modern times, issues management suffers from the same vulnerability to unknown outcomes that was faced by the ancient warriors. No type of oracle, from astrologer to statistician, is immune to mischance. Nonetheless, corporations and other organizations are constantly seeking ways to identify future trends and issues.
For large organizations, forecasting efforts can reap rewards, and the currency here is averted disasters and realized opportunities. No one can argue with Levi's early commitment to a positive Third World labor strategy; compare their actions to the travails of Nike. Whether anticipating external or internal controversy, the benefits of effective early warning systems are readily identifiable. Just ask Mitsubishi or the U.S. Army training organization.
What differentiates companies and organizations that are able to identify crucial issues early on from those that become victims, even poster children for image miscues? How do some companies correctly assess the significance of emerging social trends while others permit the really important stuff to sneak in below the radar?
The principal differences lie in a dual process of gathering and processing information. When an organization has abundant and high-quality information, the ability to identify future issues and to design appropriate responses is correspondingly good. When information flow and processing are weak, the interpretation of early warning signals often is flawed.
The bottom line is that many vital indicators of future issues are within the grasp of organizations - if they use the available information resources to their advantage and install an effective analytical process. Whether this course of action will produce effective behavioral change, however, is a different dilemma, familiar to students of corporate culture throughout the world.
It has become a cliche to say that we are in an age of "information overload," indicating that organizations are overwhelmed with data, leading to fear, loathing and paralysis. However, the fact that information is more readily available has not changed the fundamental problem: asking the right questions.
To guide organizations in assessing their abilities to ask important questions, it is necessary to focus on four core topics:
Demographic change Economic change Technological change Culture (history)
By identifying the leading indicators of change in these four areas, organizations can begin to reduce seemingly impenetrable masses of information into more manageable structures.
The field of demographics incorporates many different and interesting topics. However, it is the analysis of the age distribution of a population that offers the most timely and satisfying insights. The largest population cohort in the U.S. is the so-called Baby Boomers. This group is now in its 50s and is charged with the care of both aging parents and the increasing "boomlet" of teenage children.
Various profiles of Baby Boomers claim that they are indifferent to the importance of personal savings, interested in immediate gratification and highly critical of other generations, such as the 20-something Generation Xers. Whether or not one finds this kind of analysis convincing, a number of more quantifiable changes are taking place that will have a profound influence on Boomer behavior as time goes on.
For example, the onset of age-related diseases, from cardiovascular to prostate, has begun to mark this generation. In conjunction with experiencing the death of parents and the loss of physical vigor, palpable signs of aging and mortality are affecting the Baby Boomers. Witness the current revival of a mind-set that focuses on "simplicity" along with the impetus to follow a less materialistic lifestyle. These are the foreseeable responses to millions of careers cresting all at once while faced with the incontrovertible evidence of aging - an irreversible process.
Other demographic statistics are guides to how and where we live now. The current scene is characterized by the growing number of single mothers, the rise in the divorce rate and the increase in the number of two-income households. Inexorably, these factors have led to repercussions as profound as the demand for quality child care and as impermanent as the need for smaller-sized portions of foods compared to that of the 1950s' nuclear family.
Demographics are also key indicators of social trends and concerns. For example, in 1990, live births in the United States were recorded at almost 4.2 million, a higher figure than any year since 1960. This means that by the year 2000 there will be millions of 10-year-olds going online for the first time in affluent, opinion-leading households. The idea that concerns about Internet pornography that currently dominate the media will diminish is strongly contradicted by the demographics.
The forces that propel broad-scale economic change also have great predictive value. Interpreting the vital impetus for economic change can translate into critical information for early warning systems (not just for dictators fearing revolutions).
Consider the effect of the increase in economic power of ethnic minorities. This economic force has been a major factor in the heightened sensitivity of the mass culture to actual and perceived ethnic slurs, particularly in the U.S. In today's environment, the casting of any major consumer advertising campaign that is not racially diverse and culturally sensitive would be likely to face immediate censure.
In contrast to the prominence acquired from increased economic power is the outcome of the decline of a power base. For example, the relative decline of the heavy industrial manufacturing job base has contributed to the waning influence of the labor unions. It is important to understand that both of these economic shifts were detectable as important trends long before the issues associated with them came into the public spotlight.
Technological change drives many aspects of our lives, embracing everything from computers to space travel to health care. The widespread use of personal computers, not to mention the ubiquitous appearance of the microchip in every imaginable device, has had a profound influence on our lives.
Correspondingly, the issues raised by these technologies are intense and diverse. The millennium 2000 problem, namely the astounding fact that many computer clocks can't recognize the year 2000, is a pointedly obvious issue facing our computerized society. We are painfully aware of the issue of computerized data privacy, whether involving financial data, consumer purchasing data or health care data. Moreover, the ambiguity of legislation and regulation in this area makes it a field ripe for increasingly outrageous data "accidents."
In this arena, the issue of a company using computerized data that it "owns" in commercially productive ways is a hot topic. Health care companies, in particular, have only recently become sensitized to the need for aggressive data protection policies to manage their use of information. For example, the potential release of information about an individual's predisposition to inherited diseases poses immense problems for doctors, insurance companies and employers.
It is not difficult to foresee a situation where a wave of damaging accidental disclosures leads to restrictive legislation that goes far beyond current constraints. In this scenario, health care technology offers the choicest examples of issues fraught with danger for companies seeking to benefit from recent discoveries. Witness the sequence of events that followed the cloning of a lamb in Scotland. Little Daisy has spawned a presidential advisory commission in the U.S. to investigate questions about genetic testing and experimentation and many calls for restrictive legislation.
This core indicator is unquestionably the most difficult to use as a predictor. Culture, as a topic or a definition, is confounded by a wide range of unpredictable factors. Cultural influences that come from undirected sources - popular "cult" films, a famous murder trial, the re-proclamation of religious values or a bombing in Oklahoma City - can each invoke change. Yet there are long-term trends that can help foretell a population's response to future cultural issues.
What are some of these trends? Numerous reports document the decline in the respect for institutions and authority figures, including the church, big business and elected officials, as well as teachers, doctors and the police. This decline has been tracked for years in opinion surveys, such as the Yankelovich Monitor(TM). For corporations in particular, the decline in public respect for the government has had repercussions in shaping corporate image and behavior. Whereas at one time government standards were used as a reliable guide to acceptable corporate behavior, public opinion now has knocked government off this particular pedestal.
Paradoxically, the decline of faith in our institutions has been paralleled by an increase in our reliance on them in another area. We now look to institutions to take over influential roles as educators, guides and "experts," all of which used to be the province of families and small communities. If this curious turn of events changes course, how and when it happens will probably be signaled by opinion surveys. The data from these surveys will yield clues to companies about how they should relate to other national and local institutions.
All of the information cited above is readily available either from government or industry sources. Indeed, government researchers have been gathering trends for many years. The government's statistical databases, many of which are now online, can tell you more than you need to know about the key drivers: age cohorts, divorce rates, geographical population shifts, ethnic birth rates, memberships in organizations, and financial, economic and health data. The list is almost endless, but perfectly manageable, if you know what you are looking for. The proactive uses for these information sources are substantial.
Many sources are available for opinion research, such as the studies conducted regularly by leading research houses such as Gallop, Harris, Roper and Yankelovich. These sources can provide information about valuable indicators of change. IDC, Dataquest, Gartner Group and Forrester Research are some of the commercial technology research houses that provide useful information about the speed and direction of technological change. For example, they will tell you how many home computers have modems and what people are doing with them.
The goal of information gathering is designed to provide input into a single unified model. This model, or "issues map," is a tool that corporations can use to identify issues as they emerge, rather than after they've been bitten by them. The issues map takes the form of an inverted pyramid. By creating a picture based on demographic change first, the map defines the life stages and ethnic make-up of the target population. For global companies, this exercise obviously needs to be done separately for each major market. Basing the map on lifestages, such as entering the work force, buying a first house, putting children through college, entering retirement, or caring for aged parents, any organization can create an issues map with two primary components.
The first component will consist of changes that affect society at large. Recent examples include the focus on work-place issues, ethnic sensitivities and the attack on soft-money political financing. The second is a map drawn from broader social trends that is also dependent on the nature of each company's actual business. For example, managed care companies that sought to restrict postpartum hospital stays to 24 hours could have identified (from their issues map) that restrictions in care for this population group would generate a very negative reaction.
Once these basic demographic maps are in place, they can be enhanced and augmented by consideration of the other three filters: economic, technological and cultural. The development of online commerce, for example, presents many issues of confidentiality, consumer confidence and potential fraud. Companies that are most actively interested in promoting online commerce have joined together based on the analysis of potential problems to find ways to offer consumers better guarantees of security.
Currently, most online users are relatively sophisticated and alert to potential dangers. However, what will be the responsibility of online service providers, such as telephone companies, if cheap, dumb terminals become available to the less sophisticated and potential victims of fraud? Here is an issue that will surface in the near future and combines demographics (an aging population) with technological change (networked boxes) and economics (the decline in computing costs) to create a potential problem for the commercial online community.
Once identified, issues need to be tracked aggressively. Depending on the organization's resources, this can be done through informal monitoring of the media or through elaborate tracking models provided by third party consultants. If behavioral change is required to meet the emerging issue, a process needs to be installed to establish a timetable for change. If the corporate will is strong, companies can reap the benefits of being early adopters and avoid the penalties of being behind on the learning curve.
The process of issues identification and management is not an easy one. However, by establishing an issues mapping model based on the four indicators and implementing aggressive tracking, every organization can use communication to come out ahead. For issues management, in particular, the more knowledge gained beforehand, the greater the reduction in guesswork and unwelcome surprises. For the Croesus who looks to consult the oracle in modern times, the lesson to be learned is not to ask: "Who will win?" But rather: "Tell me about improvements in Persian chariot design."
Peter Hirsch is executive vice president, Porter Novelli, New York.
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|Title Annotation:||Issues Management: Ten Perspectives|
|Date:||Jul 15, 1997|
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