Becoming an effective leader

Outcome 2

2.1 - Review own ability to set direction and communicate this to others

Strategic Leadership


It is a vital function of leadership to ensure that there is clear strategic direction for an organisation and to be able to spot and seize opportunities for the organisation. Successful organisations are constantly looking ahead to spot opportunities and to identify where the challenges might lie. SWOT Analysis and PESTLE Analysis are 2 tools that help in isolating issues and opportunities.


SWOT Analysis


SWOT analysis – standing for Strengths, Weaknesses, Opportunities and Threats – is a well-known model that helps provide focus on key issues. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. Identification of strengths and weaknesses, opportunities and threats is all very well. However, it is a deeper level of analysis that answers the more difficult questions such as ‘so what?’ and ‘what could you do about it?’ where time is likely to be well invested. The logic behind SWOT is that strengths will always give you opportunities (and possibly threats) while weaknesses will always present potential threats (and possible opportunities).

Undertaking SWOT analysis:


·    Keep it simple;

·    Be realistic in assessing strengths and weaknesses;

·    Be specific and avoid ambiguity;

·    Consider applying SWOT to your competition; and,

·    Avoid over-analysis.

PESTLE Analysis


PESTLE analysis – standing for Political, Economic, Sociological, Technological, Legal and Environmental factors – is useful in understanding the business environment as a whole, and is often used together with SWOT analysis. Questions in applying the framework might revolve around:


·    What key political influences are likely to impact on the business?

·    What significant economic factors are there?

·    What sociological aspects are most prominent?

·    What technological advances are imminent?

·    What current and future legislation might affect the business?

·    What environmental issues need to be considered?

An  example  of  an  environmental  issue  that  might  span  several  of  the  PESTLE elements is the move to reduce greenhouse gasses. Legislation requires organisations to take certain actions and numerous economic benefits have been created for companies providing, for example, low emission materials and equipment – such as ‘clean’ vehicles, loft insulation and low energy lighting. Application of technology also has a part to play in this field, where, for example, the development of advanced computer processing units in vehicles to control engine efficiency has contributed to the achievement of ‘lean burn’ engines and lower emissions. Similarly, the creation of low emission zones in cities has created both threats and opportunities. Difficulties for transport companies arise as well as opportunities for those providing solutions – for example the production of catalytic exhausts for delivery vehicles to enable them to meet the emissions requirements.