Category Archives: Strategic Planning

How to categorise influences – the PESTLE Framework

Often-times when need a way to think about the complexity around us. We need a framework for breaking down our macro-environment into manageable chunks.

The PESTLE framework is just such a framework.

And its very handy in the context of strategic foresight and strategy planning.

The PESTLE framework has been around since the late sixties, and has been refined with the passing of years. Being pedantic, it’s properly called “the PESTLE macro-environment scanning framework”. It first started out as 4 categories: PEST. But now its common usage is PESTLE.

So what does PESTLE stand for, and why is it useful? Let’s go through the letters:

P. Political. What is happening with business policies? Are changes likely within government? What are the latest in taxation policies, government subsidies and trade negotiation outcomes?

E. Economic. How are interest rates & unemployment tracking? What are people buying? What is happening to the world economy, to the local exchange rate? What industries are doing well, what markets are becoming more turbulent.

S. Social. Think about education, lifestyle, age and attitudes of your customers. What is happening in the world of people? Are social policies changing? What TV shows are popular, what are people writing about in the “Letters to the editor”?

T. Technological. Is there much R&D out there? What about automation, the pace of change. Think also of genetics, biotech, fintech and robotics. What is the latest software and app being made possible because of the internet?

L. Legal. What changes to laws are likely to impact you? Are financial regulator legal battles of note. Are there any statutes, laws or administrative arrangements that are likely to influence your organisation?

E. Environmental. Are energy consumption patterns changing? What of climate concerns. Getting closer to where you work and live, what of the surrounding geography. Are there any likely influences as a result of changes to ecology.

So this PESTLE framework, or taxonomy, gives us a way to think about what is happening around us. For we operate our businesses in a context, a context where there are political factors, where there are economic, social and other factors. To a greater or lesser extent, changes in each of these six areas affect us.

For example, think about your customers and perhaps and either their changing economic situations, or their changing attitudes. And on the other side of the business, what about your employees. With the social system, if you will, that they live in what are they expecting from your work environment?

And from a competition perspective, are you able to pickup on and capitalise upon changes in any of these 6 areas quicker than other players in your market?

Are you using the PESTLE framework as part of your strategy planning processes?

 

For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my IT Strategy blog.

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Three Uses of Strategic Planning

Strategic planning can become quite complex.

We can go all in on Porter’s 5 forces, be thorough with our SWOT analysis, develop quite a detailed view of the organisation using the VRIO framework, base the strategic plan on some form of a Balanced Scorecard view, or even think about strategy in terms of the Value Chain.

We might even think of strategy planning and development in terms of the market cycle, even industry life cycle, in terms of diversification, mergers & acquisitions, or even some form of international expression.

But in my view, strategic planning comes down to a mix of the three main uses of strategic planning.

  1. Setting a common vision
  2. Improving resource usage
  3. Uncovering other possibilities

 

With “setting a common vision“, the emphasis of the exercise is to ensure that everyone is going in the same direction. While there may be those who wish to no longer take the same journey as everyone else, the outcome of the process is to raise the organisational flag and set the vision. It’s to get buy-in from everyone. Its to say “this is where we are going, and how we are getting there”.

With “improving resource usage“,  the emphasis is to make sure you have what you need for the journey. It’s a process of uncovering either shortcomings or abundance, of looking at what you have or what you need in order to achieve the vision. Of either doing better with what you have, putting aside the things you don’t need, or investing in labour/capital/resources to ensure your success.

With “uncovering other possibilities“, the emphasis is on finding out alternatives. Whether they be new products, markets, processes, and so on. This could be seen as the province of innovation. While in other posts I have discussed strategic foresight/thinking as solving the “what might we need to do” conundrum, strategic planning is about “what will we do and how will we do it”. Thus “uncovering possibilities” falls firmly within the “what will we do” question.

So, for the obvious question, can you use strategic planning to achieve one or more of these three aims?

 

For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my IT-centric blog.

Steps to Improve Strategic Planning

With the dawning of a New Year comes the planning for what lies ahead.

Often times its operational-level planning. The need to do X, then Y, and all going well we’ll do Z. Its tactical, its getting done what needs to be done.

And at other times we may well dive into the strategic plan and update that. We refresh the vision, make sure the mission is right, and then go about updating our strategic objectives and the related KPI’s.

But there is a whole lot more to the strategy process. For if strategic planning answers the “what will we do” and “how will we do it” questions, where do the following questions come into the picture?

  • what seems to be happening?
  • what’s really happening?
  • what might happen?
  • what might we need to do?

It seems as though these questions should be answered before we start to consider “what will we do” and “how will we do it”.

For ….

“What seems to be happening”? Do you look at trends, or ask subject matter experts for their views on what is happening, or even analyse what your competitors are doing?

“What’s really happening”? Then armed with this trend, market & competitor analysis do you then go one step further and think through all of these moving parts? Answering questions about relationships between all of these variables and causes of change.

“What might happen”? On the basis of this knowledge, do you then open the conversation back up to consider alternate futures? What scenarios could occur based on what is happening?

“What might we need to do”? And as a final step before deciding what to do, there are the reports, presentations and workshops to bring all those involved with the strategic planning together onto the same page

Answering these questions is the domain of strategic foresight. Its called strategic thinking, or futures work.

Its taking the time and effort to look beyond the normal course of events. Its about laying aside “business as usual thinking” and discovering what else might happen. Its about being open to possibilities that you either may not have considered or be comfortable with.

Its about improving your strategic planning to ensure long term success.

Are you open to considering a range of alternate futures?

For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, or review my IT-centric blog.