Interesting Times

There's an old saying (believed to be a Chinese curse) that goes "may you live in interesting times", and it implies that those 'interesting times' may be full of uncertainty, turmoil, or challenge.   Well, it's certainly been an 'interesting' week since 5 November (2024 - not 1605).  People around the world are responding differently - some are ecstatic, and some are despondent, some are filled with hope and optimism, others with despair and pessimism.  And whatever you believe about the future, change is coming and uncertainty abounds.  

As has been the case throughout history, whenever times get interesting - there is opportunity as well as threat; we need to be on the lookout for those opportunities so we can seize them, and we need to be prepared to mitigate any threats. 

Strategy is an ongoing process of achieving your goals using resources available to you while working within existing constraints; and of course, part of your strategy could be to increase your resources and adjust your constraints.  Many of these won't be changing any time soon, but some will.  Successful strategy involves constantly evaluating how the world around you is changing and responding; you don't need to change your goals, but you may have to adjust your route to get there, and any decisions about adjusting your route need to be based on good business world intelligence.   When things are changing and uncertainty increases, gathering timely intelligence becomes even more critical.  

So, how do we do that? 

One of my favourite tools within the strategic tool-box is PESTLE (Political, Economic, Socio-cultural, Technical, Legislative, and Environmental), used with a little 'forcefield analysis' on the side. 

While you can use this in a fomalised brainstorming session - and I recommend you do that at least once or twice a year - you can also just run it as an ongoing process in your mind as you are scanning the news, or chatting to people wherever they may be (customers, suppliers etc).  And, as ever, multiple perspectives are invaluable. 

Consider each of the PESTLE elements, and as you do, ask yourself "is this working for me (opportunity) or against me (threat)"; I usually draw 2 columns as I'm doing this -  that's the 'forcefield analysis'. There is actually a 3rd middle column of:  'this is happening and I don't know how it impacts me, but I'm going to keep tracking it'.  

The PESTLE Elements:   Below are the 6 PESTLE elements, with a few examples of what you could look for as you consider each: 

• Political - Politics directly shapes the business landscape and can create new opportunities or challenges. Consider government stability, regulatory policies, trade agreements, or even the current political mood. For example, a favourable trade policy might open up a new market, while a shift in tax regulations could increase operational costs.  
• Economic - The economy is the foundation of every market and industry. Interest rates, inflation, consumer spending, and employment levels can all affect your business. A recession (or fear of one) might lead to reduced customer spending, while lower interest rates might open the door to affordable financing. Understanding economic shifts can help you adapt pricing, manage costs, or even help time new investments. 
• Socio-cultural - Society’s values, attitudes, and behaviours influence both consumer demand and workforce trends. Changing demographics, lifestyle shifts, and cultural trends can either enhance or limit your product’s appeal. A rise in eco-conscious consumers, for instance, could signal a demand for sustainable products, while a shift in workforce expectations might impact recruitment. Staying in tune with social changes ensures that your brand resonates with employees and customers alike. 
• Technological - Technology is advancing at an incredible pace, transforming every industry. Look out for innovations, new digital tools, and advancements in areas like automation, AI, and data analytics. Technology can enhance efficiency, reduce costs, or offer a competitive edge. And while outdated technology could be a liability, some 'must have' technologies may be a mere fad. 
• Legal - Laws and regulations are constantly evolving and can create compliance risks or new pathways. Look for changes in labour laws, health and safety regulations, or industry-specific requirements. New data privacy laws may necessitate updates to your data handling practices, while relaxed regulations might open up opportunities for new service offerings. 
• Environmental - Environmental factors, from climate change to waste management, are becoming increasingly important for businesses. Shifts in environmental policy, consumer expectations around sustainability, or local climate conditions can influence your operations and brand perception. Extreme weather could impact your supply chain, while consumer demand for eco-friendly products might require a shift in materials or sourcing - and changes in other PESTLE elements may make that less or more difficult. 

And so ... 

Each of these PESTLE elements offers insights into the factors shaping your business environment. These are market forces, and they are also affecting your customers, suppliers, and competitors alike - what will vary is whether you see them and how you respond to them.  Using PESTLE as an ongoing mental checklist when going about your normal daily activity can help you continuously gather intelligence. Even small shifts in one of these PESTLE forces can present either an opportunity to leverage or a risk to mitigate; but you need to be aware of it to do something about it.  

Bon Voyage

Graham