What's the best way to assess the external environment using PESTEL analysis?

As a seasoned management strategist, I've discovered that conducting a PESTEL analysis is akin to a high-stakes chess game. You've got six pieces on the board - Political, Economic, Social, Technological, Environmental, Legal - each with unique moves. The challenge lies in discerning which pieces are pivotal in your industry. But remember, the chessboard is dynamic, with pieces in constant flux. PESTEL isn't merely about data, it's an unfolding saga of your organization within its market. So, savor this strategic game and let your insights shape your moves.

PESTLE is not always the best as it adds layers of complexity. For shorter and more focused efforts, PEST or STEEP are less complicated tools that accomplish the same. It's better to select those factors which are most influential to the market and focus there. Markets move faster on some of the PESTLE factors than others, and those will rapidly changing horizons can be better served with the shorter assessments.

Be careful with PESTEL. a) yes, of course it's useful to think broadly of the macro environment b) AND it can lead to analysis paralysis. What is the time frame you are considering to affect P = politics, L = legal? Yes, strategy = winning over the long-term, positioning yourself for an unfair advantage and creating an economic moat. Strategy is not dwelling on politics, environment, societal factors for too long.

In today's environment, especially with geopolitical tension, global regulatory changed with ESG, climate (I would add that as a market for defensibility, especially in supply chain), and technology and generative AI, good leaders need to be applying this to specific use cases and walk through table top exercises to understand ramifications.

One thing that the article needs to make clear of is that a macro analysis is usually relevant for long range (3-5 year) planning than for short term plans. That distinction is quite important for marketers to not get paralysed by issues that they have no control over.

In addition to secondary data sources, integrate primary sources through focused interviews with industry participants and observers. This will bring in unique perspectives and allow you to refine your analysis so that it reflects current thinking for diverse sources.

Link the implications to actions. If this happens, this is how we will respond. Too often, the PESTLE workshops present a range of potential futures but don't add what those futures mean to the organization or what the organization should do in response.

Incorporate a probability/impact matrix on the PESTLE outputs. Those events with high probability/high impact should be the focus of planning. Once the events have been determined, then build an indicator tree that identifies what has to change from the current state to the future state. This tree directs overall market and competitor monitoring priorities based on when an indicator is seen.

Using PESTEL or any other tool assessing the external environment looks so great and strategically right while we need to be careful not to pulled out of our main focus which is our internal power and values that’s keeps any organisation sailing amid external environmental forces could harm others What’s very I interesting indeed in studying external forces is preparing ourselves to alternatives and ways to overcome surprising dynamics or unexpected challenges and also be ready to share the team with the tactical steps