This simple tool is a great way to evaluate problems in your organization through an objective lens. Grace will explain how to identify your Strengths, Weaknesses, Opportunities, and Threats, when to use the PESTEL tool, and which steps you can take to get the most out of this tool.
Keep reading for a full transcript of this episode (with bonus images and links!)
If you’re looking for practical ways to identify opportunities and threats in your business, don’t just “try harder.” Instead, consider two risk intelligent options: Adapt to a changing market, or Quit and move on to something else.
In this episode, Grace explains why she started this podcast and what you can expect in future episodes. You’ll also learn where to get visual graphics & articles related to each episode, and how to submit a question.
The PESTEL tool is used to evaluate various threats and opportunities in 6 key areas: Political, Economic, Social, Technological, Environmental and Legal.
It is typically used as during long-term planning to get a macro (big picture) perspective on issues that could impact the organization. Combined with the SWOT Analysis, this tool can provide incredible insights for risk intelligent decision-making.
Today, I’m going to explain how to look for hidden opportunities and risks in your organization using a weighted SWOT analysis. This strategic management tool allows you to calculate your options, which leads to decisions that are risk intelligent.
My great-grandmother, like most women in the early 1900s, had two sets of dishes. One was a plain set for everyday family meals, and the other was a very fancy set that she only brought out on special occasions. Each plate, cup, and saucer was decorated with a design of delicate pink roses, curled ivy, and a beautiful gold inlay that encircled the scalloped edges.
She left the set to my grandmother, who then passed it on to my mother, who quickly discovered that fine china with gold detail is no match for the power of a modern dishwasher. The inconvenience of hand-washing every single item (and the risk of chipping or breaking the dishes) was too great. So those heirloom dinner dishes were hidden away in a china cabinet and only emerged on rare occasions.
As a strategic risk expert, I believe many leaders treat their strategic plan like a set of fine china. They know their plan is important; they invest time and money to create it. The final plan is detailed, logical, and beautiful.
A SWOT analysis is a strategic planning tool to identify and fix vulnerabilities in your organization. It allows you to review your company’s Strengths, Weaknesses, Opportunities, and Threats. Read How Do I Make a SWOT Diagram? to get an overview.
When used properly, the SWOT provides insights about root causes that might be causing negative outcomes. However, it is often treated like a once-and-done process, without any further analysis.
You can get the most out of a basic SWOT Diagram by going deeper, using what I call the Super SWOT.