The knowledge base consists of two types of information. Type A knowledge is the facts of the domain. Included here is the widely shared knowledge, commonly accepted among practitioners, that is expressed in textbooks and journals and discussed in classrooms, seminars, and workshops. Type B knowledge is often called heuristics. This knowledge encompasses good practices and good judgment in a field—the information gleaned from trial-and-error efforts by concerned theoreticians and practitioners. It is experiential knowledge, the art of good guessing that a human expert perfects over years of conceptual and empirical work.
ENSCAN uses knowledge from the domain of issues management and heuristics that have been developed by experts in the field. In the field of issues management, scanning the environment is conceived of as a four-step process involving identification, evaluation, incorporation, and translation.
Step One: Issue Identification. In step one the main task is to make some sense of the environment by identifying a few relevant issues. This step is the easiest one because the efforts exerted by organizations thus far have concentrated on developing techniques for monitoring and identifying key issues.
Step Two: Issue Evaluation. As one moves through the four steps of the process, the tasks become progressively more difficult. The evaluation step is, to some extent, the key to the entire process. Here issues that have been identified as being worthy of monitoring and assessing are judged for their relevance to the organization's short-term survival and long-term prosperity and growth.
Futures research is a field that offers considerable help with this task. Futures research has developed numerous methods for assessing the "importance, relevance, impact, weight,... and so on" 1 of issues and trends for an organization's internal workings. ENSCAN employs a simple method known as MIM. Issues in ENSCAN are evaluated by asking users of the system to assess the following:
- The magnitude of the issue (MAG)—the amount of attention the issue receives by the public media
- The importance of the issue (IMP)—the perceived degree of impact the issue will have on the organization
- The meaning of the issue—the perceived degree of urgency of the issue. Three degrees of urgency are used: Constraint (C), Threat (T), and Opportunity (O).
User evaluations of an issue are organized in an MIM matrix whose two dimensions are magnitude/awareness and importance/impact. Depending on the position of a given issue within the magnitude/awareness and importance/impact matrix, it is judged to be a constraint, a threat, or an opportunity. Finally, based on this judgment certain actions are recommended.
Step Three: Issue Incorporation. Issues are incorporated into the strategic planning process in the form of scenarios depicting possible states of the environment and their impact on the corporation's goals and strategies. In this step of the process, the top five or ten issues are chosen as the basis for three scenarios. An optimistic scenario will represent the situation in which the environment is most favorable to the corporation's goal-seeking strategies. A pessimistic scenario will represent the worst situation, and a most likely scenario will describe a middle-of-the-road situation.
Step Four: Issue Translation. Scenarios describing the nature of the environment and its impact on the organization must be translated into specific consequences for the organization. These consequences represent quantitative measurements of the environment's impact on the organization's inputs (resources), processes (production of the goods or services), and outputs (products or services). These quantitative measurements must be presented in the same language as is used in the internal audit of the company's strengths and weaknesses. Such translation of environmental scenarios into corporate language is manifested in projections with respect to the data contained in the corporation's main reporting instruments, such as income statements (P&L), balance sheets, and the various operating statements.
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