Today’s competitive global environment is more dynamic than ever and is one in which organizations cannot sit idly by. The financial crisis in the us economy provides a vivid example of what can happen when organizations fail to adjust to changes in their environment. However, little is known about the underlying causes of complacency and what managers can do to prevent it. This article identifies sources of complacency in four major areas: process, people, structure, and culture. We then develop a framework for assessing the need for environmental scanning based on the complexity and frequency of change in the environment. Finally, we use market examples to provide managers with useful advice on how to identify and react to complacency in their organizations.