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While our country has never before shuttered the economy, we have also never been faced with such challenges in innovation in business. “Experts” predict V-shaped and U-s0haped recoveries. Personally, the prediction of a “swoosh”-shaped recovery seems more reasonable; and it gives me hope for fan-based sports in its terminology, too.
Regardless of size or scope of your business, the so-called “reopening” allows you a chance to reset your strategy. In an earlier post, we discussed using SWOT (strengths, weaknesses, opportunities, and threats) as a strategic assessment of your internal capabilities. Opportunities and threats are external drivers in the model, yet how do you ascertain competitor actions when the shape of the business landscape has shifted irreversibly?
This is where another strategy planning tool can be of essence in resetting your business and innovation strategies. PESTLE is a technique that forces an organization to examine trends outside their control, narrowing the possible scenarios for future conditions. The acronym PESTLE represents political, economic, social, technological, legal, and environmental situations and trends.
In the US, the corona-panic has illuminated some strong political trends that are likely to continue unabated into the future. First, increased socialism and government control is likely. American citizens have demonstrated they will give up fundamental rights (e.g. the right to assembly and the right to religious freedom) when threatened with an unspecified health fear. It is unwise to trust that all elected and appointed government officials will treat their power with fairness and justice.
Second, policy makers have realized that using the word “science” in any conversation is effective to convince the electorate to succumb any personal responsibility or liberty. Many US citizens have only a limited math or science education (and, unfortunately, we continue to fall behind most other first world nations), so telling someone it is “science” without providing factual data is proof enough for most.
How do these political trends impact your business and innovation strategies? Are you positioned to take advantage of growing government bureaucracies? Will you be nimble enough to navigate a flurry and inconsistent network of illogical rules and regulations again?
There are not enough words in my vocabulary to describe the economic damage of the corona-panic. As we plan new business and innovation strategies, one key economic trend stands out. Debt. Before the corona-panic, the US economy was already headed toward an unsustainable debt-to-GDP ratio. With massive stimulus bills and shrinking output, the debt-to-GDP ratio is at astronomical levels, never seen before – even in times of war.
With a fiat currency (meaning printed money and not based on bullion value), increased debt means inflation and higher taxes. How can you incorporate these threats into your business and innovation strategies going forward? What does it mean for product pricing strategies?
Social trends are yet to be determined coming out of the corona-panic. There are some people who had readily believe the disastrously wrong models from government agencies and consequently believe any social interaction will result in immediate death. Many of us have looked at the data and will continue to want to live our lives with normal human contact: going to the movies, concerts, and trade shows.
As an individual, I dread the trend away from face-to-face events. It is nearly impossible to meet new people and to connect in a virtual world. The coffee pot conversations, lunch discussions, and happy hour connections at events allow us to interact as human beings were designed to do. No one should be expected to sit in front of a computer screen for hours (or days) on end and expect to build an important relationship.
Yet, as you reset your business and innovation strategies, virtual meetings are, at least, a short-term reality. How can you involve customers in your product innovation work in a virtual world? How will you plan for qualitative feedback when you can’t see your potential customers? What does “moving online” mean for your business?
With the advent of doing everything virtually and without contact, your business and innovation strategies must incorporate technological changes. We are sure to see a slew of new technical tools (other than zoom, I hope!) to run our business in a digital, nonhuman world. There are also going to be more frequent and more numerous cyberattacks. Are you building IT strength into your business and innovation strategies? Digital transformation trends will continue to dominate physical product development. Are you linking “digital” applications with all hardware development?
There is no doubt that legal implications will continue to grow as the world emerges from the corona-panic. HR experts will tell you that if your employees are afraid of getting sick at work, you will need to make a legal disability accommodation and let them work from home. How will you monitor project work and schedules when your staff does not meet together?
Further, if one of your team members coughs or sneezes, how do you treat that? If another team member catches a cold, will she sue you? I believe there will be a whole host of new illnesses arising from the overuse of cleaning products. Government “experts” are encouraging nearly continuous use of hand sanitizer, yet I am reminded that it is the only solution I use to effectively remove bicycle grease. Once I spilled a few drops of hand sanitizer on my desk and it removed the varnish. Are you prepared for a trend of chronic diseases from chemical usage in a workplace? What other legal implications threaten your business or the introduction of a new product?
As a result of the corona-panic, I believe there are favorable environmental trends to influence our business and innovation strategies. The tremendous hit that oil and gas took during the panic creates opportunities for petrochemical manufacturing. Distribution costs should decline as diesel and jet fuel are less expensive. Peoples’ fears regarding short-term environmental destruction have been replaced with an immediate health and safety fear. While both fears are completely irrational (and not based on existing data but so-called “science”), environmental restrictions will be loosened in many areas so business can get going again. For example, allowing a truck driver to haul two trailers in tandem versus a single trailer might benefit how your products get to market.
Use PESTLE to Design a Recovery Strategy
Every business, large or small, must deeply probe its innovation strategy today. Understanding and studying external opportunities and threats can help you formulate an effective recovery strategy. Use PESTLE to identify trends impacting innovation and business conditions during “reopening”.
What political trends are happening locally or nationally to threaten your business? Will the economic conditions (especially increasing debt, inflation, and taxes) cause a change in your business structure? Which societal trends will allow you to grow and which fears of society might threaten your innovation programs?
Examine technology advances and incorporate enhanced cyber security into your strategies. Be prepared for a slew of legal actions, especially as elections are anticipated and the way we vote in a democracy is changed away from secure and known trends. How will employee behaviors influence your strategies to prepare for health and safety lawsuits? Finally, are there any environmental trends that can open opportunities or provide a benefit to your innovation strategy?
Learn More about Strategy
Strategy lays the groundwork for all innovation work. If you don’t know what your strategy is, you cannot succeed. Contact me at area code 281, phone 787-3979 for a complimentary 30-minute innovation coaching session. We will discuss how you can apply SWOT and PESTLE in your own unique business situation to immediately see results.
- Innovation and Project Management: It’s NOT about You (PMI Houston Virtual Chapter meeting, Tuesday, 2 June 2020 at 5:30 pm, register here)
- The Innovation ANSWER Book (available at Amazon and now in Kindle format)
- NPDP certification (register for New Product Development Professional self-study here)
- 20 Tips for Innovation (webinar recording and eBook)
- The Innovation PRACTICE Book (coming soon)
- Life Design Master Mind Q&A webinar (18 June 2020 at noon CDT, register here at no cost)
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I am inspired by writing, teaching, and coaching. I tackle life with an infusion of rigor, zeal, and faith. It brings me joy to help you build innovation leaders. Teresa Jurgens-Kowal is an experienced innovation professional with a passion for lifelong learning with a PhD in Chemical Engineering and an MBA in Computer and Information Decision Making. My credentials include PE (State of Louisiana), NPDP, PMP®, and CPEM, and I am a DiSC® certified facilitator. Contact me at firstname.lastname@example.org or area code 281 + phone 787-3979 for more information on coaching for entrepreneurs and innovators.