Nnebedum: Environmental Scanning Will Enhance Real Estate Practice

Estate Surveyor and Valuer, Chika Nnebedum, speaks to Ugo Aliogo about the importance of business environmental scanning to the real estate practice and business success. Excerpts:

There seems to be sweeping changes taking place in today’s business environment. Can you describe this new reforms and the factors responsible?

The business environment is constantly changing; it is extremely dynamic in nature and volatile, resulting in the ever-changing future of the business. Therefore, organizations must always keep abreast of the happenings in its environment via environmental scanning.

The business environment is likened to the ship and the ocean. The captain must have a clear understanding of the ocean through scanning and gathering of information about the sea through the use of sophisticated navigational aids which are very useful in navigating the ocean. Organizations are open systems; they do not exist in a vacuum. They interact with the environment.

In every business organization, there are internal and external environmental factors which affect the business of a company in different ways, and these also present opportunities for the business to grow and threats that may harm the business. In other words, the external environment provides opportunities and threats to businesses, while the internal environment provides strengths and weaknesses.

For instance, internal weaknesses include personnel management such labour shortage due to insufficient finance, poor morale, company culture and technology issues (outdated software). The external threats include economic slowdowns, competition from other businesses, politics and government policy which could lead to lower revenue.As a result, environmental scanning comes into the picture because the environment needs constant monitoring. Environmental scanning is the process of gathering information about events and their relationships within an organization’s internal and external environments.

What is the concept of environmental scanning and how relevant is it in today’s business environment?

Environmental scanning can be simply defined as a process that systematically surveys and interprets relevant data to identify external opportunities and threats that could influence future decisions. Similarly, environmental scanning is the process by which organization monitors the relevant environment to identify the opportunities and threats affecting the business for the purpose of making strategic decisions.

The importance of environmental scanning to any business including the real estate business is as follows;

Environmental scanning is important for the purpose of conducting a SWOT Analysis -this includes the following: Identification of strength – The entrepreneurs or realtors can use this information to maximize their strength and earn more profits to gain complete advantages; Identification of Weaknesses – Weaknesses of the company are corrected and constrained without delay for the growth and sustainability of the company; Identification of Opportunities – Entrepreneurs or realtors can prepare to capitalize on possible opportunities that present itself on daily basis; Identification of Threats – The real estate company can come up with various strategies to diffuse and control threats, as well as minimise its impacts.

Another importance is to achieve optimal utilisation of resources or highest and best use of resources available to the estate firm. Environmental scanning helps the company avoid wastages and allow for the most effective and economical use of business resources.

In addition, its importance ensures the survival and growth of the real estate business – environmental scanning helps businesses to gain a significant advantage. It allows the firm to prepare for the future threats and opportunities, while at the same time, eliminating the weaknesses and improving the strength.

A careful scanning of the environment helps in tapping the useful resources required for the business, as it aids the firm to track their resources and optimally use it.

Other importance of environmental scanning is that it helps to plan long-term business strategy and aids decision making.

Another important point to note is that it helps in Planning for long–term objectives – Most businesses have both short term and long-term plans. Planning for long term objectives is achieved after proper analysis and environmental scanning. Thus, environmental planning helps the entrepreneur plan the necessary business strategy. Environmental scanning is an important component of strategic planning as it provides information on factors that will affect the organization in the future. The information gathered will allow leadership or management to proactively respond to external impacts. Understanding the business environment aids organizations to make realistic plans and ensure their effective implementation. It makes the task of managers easier in dealing with business challenges.

Likewise, environmental scanning Helps in Decision Making – Decision making involves choosing the best alternative, and this is usually done by the management of the company.

Environmental scanning allows the real estate firm to make the best decisions keeping in mind the success and growth of the business, while pointing out the threats and weaknesses and identifying the strength of the firm.

Most organisations found it difficult to remain afloat and stay competitive in the market after the covid-19 pandemic. What do you think was responsible?

During the COVID-19 period, most businesses were most hit by the rapid changes in the business world, and the future of such businesses were bleak due to lack of environmental scanning. Covid 19 caused a major shock and massive disruption and dislocation to organization especially small businesses as e result of lack of environmental scanning and planning, but with proper environmental scanning any organization would be able to thrive and surmount the challenges accompanied with the drastic changes in the global business environment.

To remain afloat and stay competitive in the market after the covid-19 pandemic, organizations had to scan their environment in order to plan and use innovations adopted during the pandemic to drive revenue, thereby, finding creative ways to change their operating modes and generate new opportunities as the economy recovers.

For instance, adopting new technology processes, encouraging employees to learn new skills to support changes to the business modes, using contactless deliveries to make services available to clients.

What is the core purpose of environmental scanning and how can organisations tap into it?

The core purpose of environmental scanning is to guide investors and management in determining the future direction of the organization. The purpose of environmental scanning is to provide the entrepreneur which includes Estate Surveyors and Valuers with a road map to the changes likely to happen in the future. Through environmental scanning the organization can adapt the business to overcome the threats and capitalize on the opportunities coming their way.

The basic purpose of environmental scanning is to help management determine the future direction of the organization. The purpose of environmental scanning is to provide the entrepreneur which includes Estate Surveyors and Valuers with a road map to the changes likely to happen in the future, since the only constant thing in life is change. Through environmental scanning the company can adapt the business to overcome the threats and capitalize on the opportunities coming their way.

Environmental scanning techniques include surveys, interviews, SWOT analysis and Market research. These techniques help in the identification of opportunities and threats that can affect the growth and performance of the organisation.

There are four important factors of environmental scanning which includes events, trends, issues and expectations.

The steps involved in environmental scanning include the following; Identification of environmental scanning needs of the real estate firm; Gathering of relevant information; analyzing the information gathered; communicating results obtained; making informed decisions

Legitimate means for investigating the environment Includes: Newspaper articles; Exhibitions and trade fairs; Company annual reports and Stockbroker analyses of different portfolios.

Furthermore, various sources of information for environmental scanning available to Estate Surveyors and Valuers includes; information sourced from NIESV or Real Estate newspapers, newsletters, digest, property bulletin which keeps one abreast with the on-going in the real estate sector; attending and participating in NIESV Branch and National MCPDs, Seminars and Conferences, as well as various NIESV Branch MonthlyMeetings for continuous updates of several areas in the profession that are constantly evolving.

A firm that engages in competitive intelligence or corporate intelligence will have an edge in the business world, because such firm has the ability to gather, analyze, and use information collected on competitors, customers and other market factors that contribute to a business’s competitive advantage.

What are the available types of environmental scanning?

The various types of environmental scanning include: PESTEL Analysis (which involves the analysis of the political, economic, social, technological, environment (natural environment), and legal environments); SWOT Analysis (which involves the analysis of the strength, weakness, opportunities and threats of a company in the business environment); and the Porter’s Five Forces Models.

What is the correlation between environmental scanning and real estate industry?

Environmental scanning plays a role when carrying out feasibility and viability appraisal on any project.

Environmental scanning is also important when an Estate Surveyor and Valuer carry out an environmental impact assessment (EIA) on a project. Environmental Impact Assessment (EIA) is the process of evaluating the likely environmental impact of a proposed project or development, taking into consideration the inter-related socio-economic, cultural and human-health impact, both beneficial and adverse.

Summarily, environmental scanning is important to entrepreneurs including Estate Surveyors and Valuers. When an entrepreneur comes up with new ideas, plans or innovation of any kind, he/she must first understand if the environment is suitable for such a project at that time. It helps him/her develop his/her creative ideas into actual real estate services that can be offered in the market. Therefore, scanning the environment will help him/her gauge the acceptance of the real estate services and the opportunities and threats he/she may face.

Environmental scanning makes managers aware of the linkage between an organization and its environment and keeps them alert and well informed. It helps the company to identify opportunities and threats before it, which gives them a chance to patch any loopholes. It is useful in evaluating present strategy, setting strategic objectives and formulating strategies to improve the organization performance.

It is a known fact that the business environment is like a war zone since it is highly competitive, so for any business to thrive and survive, it must be conversant with its environment.

The business environment is an important domain for any organization that must not be toyed with because of the complexity of activities that plays out around them which includes; strengths, weaknesses, opportunities and threats. Issues around the internal environment should be properly handled to enable organizations to absorb and adapt effectively to the challenges in the external environment which is most often characterized by its turbulence and dynamism.

In any business, it is important to be aware of the actions and strategies of your competitors. A business environment enables firms to analyze their competitor’s strategies and actions, so that they can create their own strategy accordingly.

Everyday new estate firms emerge and for an estate firm to maintain a competitive edge amongst others and gain sustainable competitive advantages, then such a real estate firm should embark on a proper and comprehensive environmental scanning of its environment in order to achieve business success and for sustainability. Thus, environmental scanning promotes better professionalism.

Any estate firm that wants to remain relevant and achieve sustainability in the business world must have a good knowledge of environmental scanning, its application and importance.