making better decisions - 11. PESTLE analysis
Dealing with Difficult People
This email is one in a series on decision-making. The first one is an introduction to the series.
11. PESTLE analysis
Some decisions involve deciding to operate in a new environment - perhaps you lack familiarity with all aspects of this new operating environment. Before making a decision, running a PESTLE analysis will step you through the considerations that are outside your direct control: it may help you see a risk before you're in the middle of it.
What does PESTLE stand for?
Political, Economic, Social, Technological, Legal, and Environmental
considerations as they impact the decision. This provides a better understanding of the problem space before evaluating the options (and maybe this will help you identify other options you hadn't considered).
Political
What is the political environment of the space I'm considering: is it stable? Are there taxes involved? Is it hard to trade between countries?
Economic
Thinking through the inflation rate, employment rate, exchange rate, level of employment: are there considerations you haven't noticed before?
Social
What's happening in the society you're looking to operate in? Population numbers, lifestyle, attitudes, and consumer preferences: does this impact what you're deciding?
Technological
How open to technology change are the people you're thinking about? Is the organisation you're looking at going to bring more complicating factors with new technology?
Legal
Does your industry have particular laws to comply with? Are there emerging changes to laws that will impact your options? Do you have rights to all the intellectual property you're aiming to use?
Environmental
Climate change, sustainability, resource availability, other ecological considerations - it's time to think these through.
When might the PESTLE analysis be useful?
You might want to walk through the PESTLE analysis if you're trying to do some strategic planning, assessing risk, doing some market research, trying to stay ahead of a changing marketplace, or developing new policies.
The PESTLE looks at the big picture movements that are generally out of your direct control.
Further Reading:
UNSW Library has a useful resource page for exploring resources on PESTLE further.
Have you heard of this analysis technique before?