Mals Musings: A Wake-up Call for SLEPT Analysis
Every marketing plan starts with the question, Where are we now? This is an attempt to get an understanding of the situation the organization operates within, often termed a situation analysis.
By on May 17, 2010Every marketing plan starts with the question, Where are we now? This is an attempt to get an understanding of the situation the organization operates within, often termed a situation analysis. And, as one would expect, the idea of this analysis is to provide sparks of illumination against which the organization can develop strategies.
One of the most critical analyses conducted as part of this process is the analysis to get an insight into the environment, typified by acronyms like SLEPT, PEST or PESTLE. Unfortunately, this very useful analysis has lost its impact over time.
For most of us, the SLEPT analysis does not lead to a wake up call. The conclusions are typically confusing and uninsightful. When conducted properly, the SLEPT analysis is a critical part of the strategy-making process
The environmental analysis fails to generate insights for a number of reasons. The first is usually to do with the participants; often, it is a few members of the marketing department who limit the use of knowledge within the organization.
The second reason is because the analysis consists of random and disjointed points listed in no order and with no conclusions. For example, you will often see increasing demographics listed and ready to be transferred to the part of the plan that identifies opportunities. The fundamental error with this kind of approach is that a fact has been identified but what we do not know is the consequence of this fact on the organization.
In addition, this linear approach to analyzing the environment is a poor model of reality. The factors in the environment combine in complex manners to create threats and opportunities, and it is the combined effects of these factors that we need to plan for.
A decade or so ago, many SLEPT analyses were concluding that we will have a huge opportunity because of the demographic trends as well as incidence rate for certain ailments. This was true then and remains largely true now.
However, the conclusions from these analyses were suboptimal. Even though the demographic and incidence trends did lead to increased demand, the story did not end there. In addition to this fact were government- and insurance-sponsored healthcare budgets growing in line with GDP, which was way off the growth in expenditure.
These opposing forces actually meant instead fewer opportunities. The reality was that we were about to enter a period of price pressure where the value delivered would be under greater scrutiny. The implications that affect us are usually a result of two or three factors intertwining rather than the linear conclusion most SLEPT analyses draw.
To conduct an effective SLEPT analysis, you need to involve or gather information from a good cross-section of the organization. Typically, you will end up with 30 or so factors that are important.
The next step is to articulate how these factors could affect your organization. The next and important step is to then review the implications derived, to try and identify combined implications; i.e., how some of the implications combine with others to create a new scenario.
In order to complete the situation analysis, there are other tools like Five Forces and internal analysis that will help to give a rounded view. However, it is important that all analyses are conducted with the organizations mission in mind.
In the end, the SLEPT analysis empowers the planning process by identifying threats and opportunities for the SWOT alignment. When conducted properly, a SLEPT analysis is a powerful and illuminating tool that can deliver a timely wake up call.