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In Focus: The recovery is bumpier than expected - it's time to re-think your PESTLE analysis.

Updated: Mar 1

Our In Focus series of articles originally appeared in The Leadership Bulletin, a free weekly bulletin for leaders and managers. You can subscribe here.

A PESTLE analysis is a fairly common way of getting a big picture view of the context in which you operate. Like so much in management, its name is an acronym against which you’re invited to consider the factors impacting on your organisation:

  • Political

  • Economic

  • Social

  • Technological

  • Legal

  • Environmental

If you have never done a PESTLE analysis before, I strongly recommend it. If nothing else, it will make you think about many of the things you take for granted and consider the impact changes beyond your control could have on the way you work.

If you have already done a PESTLE analysis, here’s the key questions: when? When did you last update it? And is it fit for purpose in the new financial year?

Several businesses I have spoken to in recent weeks haven’t updated their PESTLE analysis since before the pandemic, the scale of which made all their prior assumptions redundant. But with new models of politics, economics and working life emerging across many countries, there’s rarely been a more important time to understand PESTLE factors and their impact on your organisation.

Here are three things I would make sure are included in any PESTLE analysis today:

Labour shortages. Last year, a shortage of workers briefly made the front pages. But many employers are still reporting difficulties in finding the staff they need. Ask yourself: how would this impact on your organisation and how would you mitigate against it? Can you invest in technology to act as a fall-back? And what can you do to retain and re-train your existing staff to avoid employee flight?

Tax increases. In April, National Insurance for employers and employees will rise by 1.25 percentage points to provide additional funds for the NHS and social care. And from April 2023, corporation tax on profits over £250,000 will increase to 25%. How will these changes impact on your business and how should you be planning for them now?

Net zero. It wasn’t all that long ago that climate change was a niche concern; now, it’s on everybody’s lips. The UK government is committed to achieving net zero by 2050 and many customers want to see companies understanding and adapting to environmental concerns. What impact might these political and social changes have on your organisation and how can you stay ahead of your competitors and your customers’ expectations?

There are lots more issues to consider, some of which are particular to your sector and some of which will be true of all organisations in the UK/Europe/world. But the message from this bulletin is clear: spend some time refreshing your PESTLE analysis and make sure you’re as prepared as you can be for the future.