Chaos usually happens when we let down our guard against risk. A simple way of determining what sort of personal or organizational risk to guard against is to analyse where the risk comes from. Francis Aguilar, a professor in strategic planning, used the acronym of PESTEL as a method where we can identify and prepare against external risks.

The acronym PESTEL stands for Political, Economic, Sociocultural, Technological, Environmental, and Legal. We can use it to reduce risk while working through the ordeals of life.

Here’s a brief explanation of each factor:

Political: This refers to government policies and regulations.

Economic: This factor looks at the overall economic conditions and trends such as inflation, interest rates, exchange rates and economic growth.

Sociocultural: This factor considers the social and cultural factors including lifestyle trends which may create dysfunction.

Technological: This factor examines the technological advancements that could impact a day to day living.

Environmental: This factor considers how the natural environment can impact our lifestyle and includes factors such as climate change and natural disasters.

Legal: This factor examines the laws and regulations which impact our lives, such as health and safety regulations, labour laws, etc.

By analysing each of these factors, we can gain a better understanding of the external environment and make informed decisions about our lives.

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