How do you analyze your organization's environment?

A PESTEL analysis offers a comprehensive view of the external factors impacting an organization, divided into Political, Economic, Social, Technological, Environmental, and Legal categories. It explores how government policies, economic conditions, social trends, technological advancements, environmental concerns, and legal frameworks might affect business operations and strategies. This analysis helps organizations identify opportunities for growth and potential threats to mitigate, enabling them to adapt their strategies in response to the external macro-environment. By understanding these external factors, businesses can make more informed decisions.

"‘It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.’ – Charles Darwin. Analyzing your organization's environment involves gathering and assessing internal and external factors affecting operations. Conduct SWOT analyses, market research, and stakeholder feedback to identify strengths, weaknesses, opportunities, and threats. Continuously monitor trends and adapt strategies accordingly to maintain competitiveness and sustainability in a dynamic landscape."

Conducting a SWOT analysis on your organization is a highly impactful way to assess your operations. It offers a framework for thoughtful, strategic planning and decision-making, which is essential for the successful operation and growth of your business. Additionally, it is important to note that this analysis is capable of evaluating any business.

Strengths: These are the internal capabilities and advantages that set your organization apart. They can include things like skilled personnel, unique technology, strong brand, or efficient processes. Weaknesses: These are internal aspects that hinder your organization's performance, such as a lack of resources, outdated technology, or ineffective management practices. Opportunities: These are external factors in the broader environment that your organization can leverage for growth. This might involve emerging markets, changing consumer trends, or advancements in technology. Threats: External factors that can potentially harm your organization are threats. These can include market competition, economic downturns, or regulatory changes

I consider SWOT to be an extremely beneficial analysis tool, especially when combined with TWOS. TOWS acts as a valuable extension to the SWOT analysis. I recommend familiarizing yourself with TWOS framework as it merges all four factors into pairs to create a more practical strategy formulation framework.

Porter's Five Forces is a strategic framework that assesses an industry's competitive dynamics by examining the rivalry among existing competitors, the threat of new entrants, the potential for substitute products or services, the bargaining power of buyers, and the bargaining power of suppliers. By evaluating these forces, organizations gain valuable insights into their industry's attractiveness, enabling them to make informed decisions and develop effective strategies to enhance their competitive position and profitability.

Stakeholders must be aligned to same vision and mission and passionate in the progress of the entity. "To create a stakeholder map, you should list and classify your stakeholders according to their power and interest in your organization and its goals." The above statement sums up quite well.

By classifying stakeholders based on their power and interest, typically in a matrix or diagram, you can effectively prioritize your engagement with them. Key stakeholders, with high power and high interest, require close management due to their strong influence. Important stakeholders, with high power but low interest, should be kept satisfied and informed. Interested stakeholders, with low power but high interest, need to be consulted and updated, while marginal stakeholders, with low power and low interest, should be monitored and communicated with as needed. This approach ensures a well-rounded strategy for managing stakeholder relationships.

Based on my personal experience, the competence and capabilities of the leadership team play a crucial role in conducting an environmental analysis. There have been instances where the leaders disregard the significance of developing strategies and consider tools such as SWOT/TWOS/PESTLE as mere theoretical concepts. Hence, in my opinion, having the support and alignment of the stakeholders/leadership is vital in effectively evaluating an organization from all angles.

From my personal journey, key factors impacting the organisation as a whole are; 1) defining the purpose and the vision 2) who is our target audience 3) what problems are we trying to solve 4) who is our competitor and how are we different from them 5) why are we doing this, what are we doing and how are we going to achieve - have a clear vision & strategy 6) do we have a storyline that resonates with our teams and target customers 7) is our team fully sold into this concept, would they own it 8) are we reinventing the wheel or bringing an innovation & revolution 9) what's our exit strategy 10) the penetration test of our product? 11) have we brought in the key stakeholders and SMEs 12) do we have a team or a crowd of people(Golden rule)

In today's rapidly changing business landscape, adaptability and innovation are becoming increasingly crucial. Organizations need to be proactive in identifying emerging trends, disruptive technologies, and shifting consumer behaviors. Embracing a culture of continuous learning and agility is key to staying competitive and ensuring long-term success. It's not just about reacting to change but also anticipating and driving change to create new opportunities. Companies that foster a culture of innovation and flexibility are better equipped to thrive in an ever-evolving world.

In my experience when analyzing your organization's environment you can use the above mentioned frameworks. You can also do a Market Analysis understanding the dynamics of the industry including competitors, market trends and potential disruptors. Analyzing also technology, economic and social trends can also support your holistic approach.