Using PESTLE – A systematic Approach to Horizon Scanning

PESTLE is a useful future planning tool

Most organisations when developing strategy will have a variation of the PESTLE model in place to enable them to “horizon scan” to inform their decision making for the future, or future planning.

PESTLE is an acronym for

  • Political  – Understanding the political landscape such as the direction of governmental policy, including monetary, employment or environmental laws and regulations is essential.  This might include wider political issues, either continental or global.
  • Economic – Taking into account the economic situation and forecasts is essential, economic issues might impact on salary costs, taxation, lending and index linking.
  • Sociological – Understanding the demographics which impact you or your business, which could include issues like people working for longer, and changes in ways people live, for example, the housing shortage or advances in health care.
  • Technological – Understanding the possibilities from a technological point of view is essential to developing strategy.  For example, younger people engage online in a completely different way to older people and you might need to adjust your plans to make sure your customer or employee engagement plans are in line with these changes. Technological advances like the “Internet of Things” will considerably change our paradigm on physical goods.
  • Legal – Legal issues can include employment or trading laws, or anything affecting legally how a company operates.
  • Environmental – This can include things like “Green issues”, or the tension between man-made products or supplies which  can affect the environment.

These are the most common factors which will impact on businesses or organisations and inevitably need to be considered when developing future planning.

Part of the process of using PESTLE is to be able to identify appropriate authorities and research or other appropriate sources of information which will inform decision making.  Analysing the information and aligning with the impacts on an organisation is vital.

The benefits of understanding and using PESTLE for leaders, managers, employees and even job candidates is enormous.  The skill of horizon scanning can be a valuable one and while some people are naturally inclined to consider future planning and therefore PESTLE, for others it’s less of a preference and this is where the model can be particularly effective.