PEST analysis is a valuable tool for understanding the external macro-environment in which your business operates. It can help you to better understand the range of trends, influences and forces that may represent either threats or opportunities to your firm.
PEST stands for Political, Economic, Social and Technological. PEST analysis is an excellent forecasting tool that can help you to forecast key trends and developments in your industry or profession. Typically, the results of a PEST analysis are integrated into an organization’s strategic planning process, to help ensure that it is aligned with these forces. This planning is especially well-suited to mind mapping because it gives you a valuable “at a glance” look at the trends and forces affecting your business enviroment.
To create a PEST mind map, simply place each of the four major forces – political, economic, social and technological, each on its own first-level branch. Then, spend some time brainstorming around the mega-trends that are occurring in each area. For example, some of the predominant economic forces may include unemployment, consumer confidence, energy costs and taxation. Technological forces may include automation, shrinking product life cycles, production technology and the growth of social networking as a communication tool.
As you identify trends for each major topic, add them to your map, and explore them in depth. Next, identify which of them are likely to have the greatest impact on your business and highlight them for emphasis. Also, consider any connections between any of these forces, and use relationship lines to depict them.
Many businesses spend too little time trying to understand the forces that impact them. At best, a handful may look at the threats and get really nervous. But imagine the opportunities you could uncover using this method – the “distant early warning” signs of emerging trends that, if you capitalize upon them in their early stages, could really pay off for you in the years ahead. So why not use your mind mapping program to perform a PEST analysis on your organization today?
(This post was inspired by a description of PEST mapping in Tony Buzan’s and Chris Griffith’s new book, Mind Mapping for Business)