Category Archives: Strategic Planning

Digital Economy Series: Through what eye do you behold a digitising economy?

In order to answer this article’s question we need to appreciate how our perspectives have developed. For it is important to note that not only do we all have our own biases but our world views aren’t always in synch on any one of a number of issues.

high angle photo of robot
Photo by Alex Knight on Pexels.com

This development process starts with our beliefs. These are shaped by factors such as our culture, our education and our experiences. What we hold dear, our values, not only grows out of our set of developed beliefs but are also shaped by our family’s values and our successes in life. What builds on these two, in turn, is first our attitudes and finally our behaviours.

This is where our perspectives of the future digital economy come into play. Because the future can not be studied, as it does not yet exist, only our images and conceptions of the future can be. These ideas are built upon our beliefs, values, attitudes and behaviours. The vision that we each have of what a fully digital economy will look like depends upon our biases and world views.

Consider the question: “what do you think the future will be like?” From a temperament perspective, are you a hopeful person and by default you look for win-win outcomes? Or are you one who has been bitten by identity fraud and based on your experiences your answer is laced with skepticism. The implication here is that an argument for a fully digitised economy that is utopian in nature could be just as well received as well as one that is dystopian.

The question that follows from this first consideration is this: “what future are you afraid of?”. If you fear being manipulated by omnipresent artificial general intelligence, then you may well rail against “the machine” as it currently stands. Perhaps even exhibiting Luddite-like qualities in your attitude toward technological developments.

In discussing how the future of the economy could unfold, specifically the degree to which it could be digitised, we have seen that there is not one preferred scenario. Several possibilities could eventuate. What underpins any of these paths is the growing preponderance of the digital bit in creating economic value. For it used to be that the economy was solely based on what we could do with the atom – build things, sell things and establish bases of power through the material world. But now it is the world of the bit that is increasingly ubiquitous.

There are then several issues that flow from this increasing digitisation: the skills that we trade for value in the workplace, questions concerning the knowledge and wisdom that can be derived from a super-abundance of data, social responses to the changing structure of the economy, and the shape of governance structures surrounding corporates and other institutions. Finally, what may arise from this trend toward increasing digitisation is the emergence of an “intelligence economy”. One that supersedes the digital economy. An economy where real value is no longer held in varying compositions of bits, but in prized abstractions of knowledge stored in quantum computing machines.

In looking forward from the vantage point of today, what is your preferred future? How would you like this increasingly digital economy develop? Are you hoping for one that is based on solely the taxation of capital, thus freeing humanity through the mechanism of a universal basic income? Or are you hoping that life continues as it is, albeit with some form of control mechanism that reduces any digital encumbrances arising from social toxicity?

Whether we gladly accept this trend or hold deep reservations, the future is progressively digital. This phenomena will impact how value is created, how we lead our lives, and how the state conducts its governance. The nexus of all aspects of the future economy will rest on streams of ones and zeros. For just like the harnessing of physical streams by the waterwheel led to all manner of outcomes, so to will the technology that harnesses digital streams.

 


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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.

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.