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P.E.S.T.L.E. analysis for associations

Many organizations, for-profit and not-for-profit alike, are revisiting their strategic plans disrupted by the ongoing pandemic. One framework that has proved vital in analyzing what is happening out there and the impact to an organization is “Pestle.”

The Pestle analysis tool is used for assessing political, economic, socio-cultural, technological, legal and environmental factors. Examples of what might an association consider under each factor are the following:

Political—relates in general to political stability and how the government intervenes in the economy such as labor laws, tax policy, trade restrictions, as well as in health, education, and infrastructure. A retail trade association, for example, may prepare a position paper or consult lawmakers if there are laws or regulations affecting its industry.

Economic—covers factors that affect how businesses operate and make decisions, such as rates of economic growth, inflation, interest and currency exchange. A negative economic growth could cause unemployment and affect a trade association or a chamber of industry members’ ability to pay their membership dues, eroding revenues.

Social—includes population growth rate, age distribution, career attitudes, safety, as well as cultural aspects and health consciousness. A growing millennial generation may cause a professional society to revise its membership recruitment policy.

Technological—aspects like research and development activities, automation, technology incentives and the rate of technological change. More than ever, associations may have to consider a digital transformation, no matter modest.

Legal—covers laws and regulations on discrimination, consumer protection, antitrust, employment, as well as health and safety that can affect how businesses operate in terms of, among others, costs and product demand. An association could consider having a record of all applicable laws and regulations as part of its risk management system.

Environmental—includes ecological and environmental aspects such as climate change and sustainable production and consumption which have direct effects on trade associations and their members in industries such as tourism, farming and insurance.

I gained further insights on Pestle when I attended Gihan Perera’s recent webinar, “Clear Planning for an Unclear Future.” Gihan is a futurist, online presenter, conference speaker and author. Forbes magazine rated him as the fifth social-media influencer in the world (first in Australia) in his area of expertise. Gihan provided the following Pestle factors that are at play within our environment today:

1.  Covid-normal (hygiene, rapid testing, contact tracing, treatment, vaccine)

2.  Alternative food sources (food production, supply chain)

3.  Mental health issues (stress, anxiety)

4.  Losing key people (due to changing priorities and preferences)

5.  Work from home (issues on human resource management, productivity, use of technology)

6.  Consumer priorities (online sales, contactless transactions)

7.  Artificial intelligence (and impact on human relationships)

8.  Telehealth (remote delivery of health care services)

9.  Global trade (import and export of goods and services across international boundaries)

10. Regional rising (migration from cities to regions/provinces)

So what Pestle factors are affecting your association today?

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The column contributor, Octavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific and the Founder & CEO of the Philippine Council of Associations and Association Executives. PCAAE is holding the Associations Summit 8 on November 25 and 26, 2020 with the theme, “Leading with Agility.” The two-day virtual event is supported by Adfiap, the Tourism Promotions Board and the PICC. E-mail inquiries@adfiap.org for more details on AS8.

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