The many factors that influence and often affect businesses can be analysed into two major sectors, internal and external.
The key to this is predictability with the consequent result of being able to accept, understand and proactively react.
The external factors are more significant. For one thing they can be entirely unpredictable and eve if we have advance notice there is nothing that we can do to affect their implementation.
In essence the only thing that we can do is either to wait until something happens and then react accordingly or, better, try to anticipate what might happen and make preparations to react.
A mnemonic, PESTLE, has been evolved which is the basis of the analysis as follows:
For many reasons the political aspects can be more predictable than the others as most of the legislation has been or will be published and again most of it, if enacted, will not be in force for a significant period of time.
This means that it will be possible to check which pieces of legislation will affect us directly and to make sure that we have a plan in place to cope with any major changes.
Typical of this would be European employment legislation, which affects us all if we are employers.
The economy affects us to a lesser or greater extent and again it makes sense to monitor what is happening and what is likely to happen.
Many of the banks in Europe, including the UK, have been supporting the Greek banks and if they collapse which is always possible then they will experience substantial losses.
While hat should not affect us directly any losses will affect the markets and possibly even restrict lending. Will we need finance at some time in the near future and if it proves difficult what would be our plan B?
Social aspects are much more difficult to predict. We are only just into a five-year Parliament and not much of the proposed legislation has been announced. In a social sense, watch out for the reductions in the welfare budget with savings of £12bn on admittedly a total payout of around £112bn.
However the reduction in tax credits for working people replaced by the new National Living Wage may have an effect on employment levels and in an environment where jobs are becoming more available this may mean some losses of employees. All of this is likely to provoke some price inflation so watch out for that sort of pressure.
Take a view on technology. The changes in the past five years have been exponential and there is no way that the rate of change in development and innovation is going to diminish. If there are likely to be dramatic changes in the technology that either affects you or you are using then be prepared for it.
The legal aspects in general are offshoots of the political and social factors but a discussion with your legal advisers should uncover any proposed changes that are likely to affect you either way.
Finally the question of the environment is gaining momentum and the Environment Agency is becoming more proactive. Be sure that whatever you are doing make certain that you are compliant and watch out for any changes in the legislation that might affect you.
All in all, the mantra should be “Be Prepared”. It makes real sense to set up a small working party to keep tabs on what is happening and to ensure that we are ready for anything that is thrown at us, as far as possible that is.
If we can’t affect these criteria, we can at least be ready to react positively and remember we might just gain from any change we implement.
Download my book "Leading to Success" from Amazon
Visit the Vistage UK website