Most risk tools look inside: your process, your parts, your bots. Some of the biggest risks come from outside. These two tools look out the window.
PESTLE
PESTLE is a checklist of outside forces. It's often traced to Francis Aguilar's 1967 book on scanning the business environment and has been extended over the years:
| Letter | Force | Examples |
|---|---|---|
| P | Political | Trade policy, tariffs, government programs |
| E | Economic | Interest rates, material prices, labor costs |
| S | Social | Workforce age, customer expectations, attitudes to computer intelligence |
| T | Technological | New processes, new artificial intelligence models, automation |
| L | Legal | Regulations, privacy law, product liability |
| E | Environmental | Emissions rules, energy costs, climate risks |
For each, you ask: what's changing, and how could it help or hurt us?
Porter's five forces
Michael Porter introduced the five forces in the Harvard Business Review in 1979. It explains how much profit is possible in an industry:
- Rivalry among current competitors.
- Threat of new entrants.
- Bargaining power of suppliers.
- Bargaining power of buyers.
- Threat of substitutes.
Strong forces squeeze margins. Weak forces leave room.
Why it matters right now
Computer intelligence is changing several of these forces at once. A bot that drafts quotes in minutes changes rivalry. Cheap analysis lowers barriers for new entrants. And your model provider is now a supplier with real bargaining power. See Suppliers: connectors, models and other people's bots.
Why people skipped it
Both tools take research: reading industry news, regulations, competitor sites, economic data. It usually gets done once a year for the strategy offsite, from memory.
How a bot does it
- Give the bot your business description and, if it can search, permission to research.
- Have it fill each PESTLE letter or force, with sources and dates.
- Have it rate each item for likely impact on you.
- Have it flag what's new since the last run.
- A person reads the high-impact items and decides what to act on.
Run it quarterly. With a bot, that's cheap.
The bot brief
Run a PESTLE scan and a five-forces analysis for [business, market, region].
Business description: [file]. Previous scan: [file, optional].
For each PESTLE letter: 2-5 current developments. Each needs a source link and date.
If you can't find a source, leave it out — don't fill from memory.
Rate each: impact on us (High/Medium/Low) and direction (helps/hurts).
For each of the five forces: current strength (High/Medium/Low), evidence, and
how artificial intelligence or automation is changing it.
List what changed since the previous scan.
End with the 5 items most worth a manager's attention.Starting point only. Test it on your own data and model, and adjust as needed before you rely on it.
An example (two rows)
| Item | Source | Impact | Direction |
|---|---|---|---|
| Steel price index up over the quarter | [industry index, dated] | High | Hurts |
| Competitor now promises same-day quotes | [competitor website, dated] | High | Hurts |
Each row cites a dated source. A row with no source isn't a finding. It's a rumor.
Where bots differ
This is research, and research is where bots most often make things up. A plausible-sounding regulation or price trend with no source is worse than nothing. Require a link and a date on every item, and click a few. See Hallucinations.
Also, a bot's training has a cutoff. Without a search tool, it doesn't know this quarter's news. Give it search, or give it the sources.
What this means for you
- Scan outside the building at least quarterly.
- Have a bot do the research, with links and dates.
- Read the high-impact items.
- Feed what you find into SWOT and your risk tables.