Change & Scanning Our Ecosystems with PESTLE Analysis

“We cannot change what we are not aware of, and once we are aware, we cannot help but change.” Sheryl Sandberg 

Our ability to change with intention requires well-informed awareness. This applies to change ranging from personal to organizational to societal. Intentionality requires us to pause, scan and be aware of the ecosystem surrounding us whether as:

• an individual in our personal lives, or 
• a collective such as in our families, schools, workplaces, extra-curricular and faith-based organizations, communities or even broader as in state-wide, nationally or multi-nationally.

An individual or group pause to assess occurrences beyond our immediate, metaphorical walls are too often overlooked apart from high stake undertakings with sizable financial, social or human capital risk. When pause does occur, it may be heavily informed by our most recent or immediate experiences including emotion. We can become so immersed in daily routines and operations, and their related aches, that we place energy where it provides maximum near-term relief. While we must act for immediate relief during extenuating circumstances, like during crises, our actions can risk being premature or suboptimal in their impression.

When we pause with intention, it opens our awareness to what is impacting or even disrupting our circumstances. We can then thoughtfully contribute to action and resulting change that is more well-informed, effective and sustainable. Examples of where this change applies in the business environment is with strategy, business and operating plans.

The PESTLE Analysis tool is one of my favorites to leverage for a well-rounded pause and resulting analysis. It helps elevate the daily boots-on-the-ground experience to a more macro-level view of our current and emerging circumstances. While there is not agreement on who is fully responsible for this tool which evolved over decades, its roots are often credited to author and former Harvard Business School Professor Frank Agular. 

While PESTLE Analysis is typically associated with business, its scalability extends its relevance from personal to multi-national application. That is, it can be used to assess contributors impacting change from those in our personal lives to our business organizations to the state or province in which we reside to our country and beyond.

So, what’s a PESTLE Analysis?  A PESTLE is an analysis tool that guides assessment from an outside-in perspective across six dimensions including:

1. Political,
2. Economic,
3. Sociocultural,
4. Technological,
5. Legal, and
6. Environmental.

While there are six dimensions, these can be considered in any order and change contributors may fluctuate. Each use captures a moment in time. During especially volatile or disruptive periods, more frequent pauses and resulting analyses may be merited to capture newly surfacing change disruptors.

A hypothetical example of change contributors within each dimension is below for business pertinence yet can be adapted to meet other application needs. For example, if one was using this to assess personal change disrupters at a macro level during or following the COVID pandemic, a marital divorce or separation, or during personal illness, the change contributors could be modified for personal relevance. 

To take this a step further, PESTLE Analysis tool application can be as simple or complex as you desire and needs merit. For example, within each of the six PESTLE dimensions, you might focus on change contributors of greatest priority. You might also dive even deeper into each dimension and its related change contributor(s) by asking SWOT Analysis related questions like in the example below using the PESTLE dimension, Economic.

Applying SWOT Analysis as a next-level analysis tool essentially results in what is good or bad, or desired or undesirable, about today (i.e., the current state) and tomorrow (i.e., the future state). In considering resulting change and action, this can inform what we:

• leverage, continue, continuously improve or capitalize via identified Strength impacts;
• develop, remedy or continuously improve via identified Weakness impacts;
• pursue or reprioritize for greater investment via identified Opportunity impacts; and
• mitigate via identified Threat impacts.

However you leverage PESTLE Analysis, adding it to your toolbox can offer practical, content-rich output so that we not merely react to change from awareness and necessity, but we respond to change through intention and thoughtful strategy.

Interested in learning more about this framework? Michelle Leedy will host a dynamic panel conversation with thought-provoking and experienced leaders from JPMorgan Chase, AEP, Grange Insurance, and Bath & Body Works at the COE Summit 2024. 

The Ohio State University Center for Operational Excellence Summit, now in its 11th year, is a 3-day event dedicated to connecting diverse industries and organizations to the latest best practices in leadership and problem-solving. With 4 engaging keynotes, 20 breakout sessions, and exclusive opportunities for networking and hands-on learning, the COE Summit is a high-value opportunity to equip your team with tools and tactics to spark sustainable transformation.

Learn more and register for the COE Summit 2024