This is a bit of self-plagiarism. The following piece was published in the City Business Magazine Dec/Jan 2005/6 issue. This magazine is circulated free to SMEs in South Yorkshire.
This is a tale from North America. A young Native American boy wants to put his courage to the test so he asks his grandfather to take him into the wild forest. They enter the forest and the old man leads his grandson deep into its heart. They come to the edge of a clearing and peering through the leaves the boy sees that resting in the clearing is a pack of wolves. These creatures are notorious for their size, fierceness and cunning. His courage seeps away and the boy trembles in fear, but when he turns to his grandfather he sees that the old man is calm and relaxed.
Then something disturbs the pack. They get to their feet and slink off into the undergrowth without a sound. The clearing is now empty and peaceful. The boy regains his courage and turns to his grandfather with a smile on his face - only to see his grandfather shivering with fear...
The moral of this story is that in life - or business - the real dangers that threaten us are not the things we know about but the things we don't know about. More information can help reduce these "unknowns" but we inevitably concentrate on the "known unknowns" and forget about the "unknown unknowns" - the wolves that we don't know are there.
One solution is to conduct an environmental review - to examine the environment in which your business operates in and look out for the wolves. A memory aid for this used to be PEST = Political, Economic, Social and Technological, but this has now been inflated to SEPTEMBER - Social, Economic, Political, Technological, Environmental, Marketing, Buying groups, Equilibrium of power and Regulatory.
Whatever acronym we use we should sit back every so often and scan the environment. And if we don't see any wolves we should ask ourselves "where are they hiding?"