STEEPLE

A seven-factor framework for macro-environmental analysis in strategic foresight

Introduction

STEEPLE is a seven-factor framework for macro-environmental analysis that helps organizations systematically examine the external forces shaping their operating environment. The acronym stands for Social, Technological, Economic, Environmental, Political, Legal, and Ethical factors.

As an evolution of the earlier PEST and PESTLE frameworks, STEEPLE represents the most comprehensive taxonomy for environmental scanning in strategic management and Futures Studies. It serves as a “supra-system” audit, forcing analysts to look beyond immediate operational concerns toward the broad, long-term trends that will eventually reshape industries and organizations¹.

The framework operates on a core premise from systems theory: organizations are open systems that interact dynamically with their environment. They import information, resources, and constraints from their surroundings, transform them, and export products and services. Failure to systematically scan this environment leaves organizations “blind and deaf” to the forces that determine their viability².

Origins and Evolution

The intellectual history of STEEPLE is a narrative of increasing complexity. As the business environment has become more multifaceted, so too have the frameworks designed to map it.

The Aguilar Origin: ETPS (1967)

The genesis of modern environmental scanning can be traced to Francis J. Aguilar, a professor at Harvard Business School. In his seminal 1967 publication, Scanning the Business Environment, Aguilar formalized the “outward look” of strategic management³.

Aguilar proposed a taxonomy known as ETPS (Economic, Technical, Political, Social), reflecting the managerial priorities of the 1960s post-war industrial boom. His contribution established the fundamental premise that the acquisition of external information is a cognitive and organizational capability determining firm performance⁴.

The Evolution Chain

This evolution was not merely semantic—it represents a deepening understanding that the “environment” is not a monolith but a complex system of interacting subsystems⁵.

Unlike many management frameworks, STEEPLE has no single inventor. The expansion from PEST to PESTLE to STEEPLE emerged through emergent practice evolution: a pattern where tools develop organically through consulting practice, teaching materials, and professional body curricula rather than through formal academic publication. UK-based organizations and professional bodies (CIPD, CIM) played a particularly significant role in codifying and propagating these expanded frameworks during the 1990s and 2000s⁶.

The reordering of letters from PESTLE (Political first) to STEEPLE (Social first) reflects a pedagogical choice rather than a substantive change—both frameworks cover the same domains. The STEEPLE ordering may emphasize the primacy of social and demographic change as drivers of the other factors⁷.

The Seven Dimensions

S - Social Factors

Definition: The demographic and cultural forces that shape markets and stakeholder expectations.

Key Questions:

• How are population demographics shifting (age, migration, urbanization)?
• What lifestyle and consumption patterns are emerging?
• How are attitudes toward work, health, and family evolving?
• What cultural values influence acceptance of products and services?

Examples: Aging populations in developed economies, the “wellness” economy, shifting work-life balance expectations, generational attitude differences (Gen Z values)⁸.

T - Technological Factors

Definition: The tools, innovations, and infrastructures that enable or disrupt value creation.

Key Questions:

• What emerging technologies could disrupt current business models?
• How rapidly is technological obsolescence occurring?
• What infrastructure investments are enabling new possibilities?
• How quickly is society adopting new technologies?

Examples: Artificial intelligence and automation, blockchain and distributed systems, biotechnology advances, renewable energy technology, 5G and connectivity infrastructure⁹.

E - Economic Factors

Definition: The macroeconomic forces determining financial viability and market conditions.

Key Questions:

• What are the trends in GDP growth, inflation, and interest rates?
• How are labor markets and employment patterns changing?
• What trade dynamics and currency fluctuations affect operations?
• How are supply chains being restructured?

Examples: Post-pandemic supply chain restructuring, inflation pressures, “near-shoring” and “friend-shoring” trends, labor market tightness, cryptocurrency and DeFi emergence¹⁰.

E - Environmental Factors

Definition: The ecological and climate-related forces affecting operations and legitimacy.

Key Questions:

• What physical climate risks threaten assets and supply chains?
• What transition costs come with moving to low-carbon operations?
• How are sustainability expectations from consumers and regulators evolving?
• What resource scarcity issues may constrain operations?

Examples: Climate change physical risks (floods, fires), carbon taxation and pricing, circular economy expectations, sustainability reporting requirements, biodiversity concerns¹¹.

P - Political Factors

Definition: The distribution of power and government intervention shaping the operating environment.

Key Questions:

• What is the risk of regime change or political instability?
• How are trade policies (tariffs, blocs, sanctions) evolving?
• What fiscal and monetary policies affect demand?
• How are geopolitical dynamics (multipolarity) creating fragmentation?

Examples: US-China relations and technology decoupling, populist political movements, defense spending shifts, energy security policies, regional trade bloc dynamics¹².

L - Legal Factors

Definition: The codified rules, regulations, and judicial systems defining operational constraints.

For a comprehensive examination of this dimension, see The L in STEEPLE.

Key Questions:

• What employment and labor regulations apply?
• How is intellectual property protected across jurisdictions?
• What competition and antitrust frameworks constrain market behavior?
• What industry-specific regulations govern operations?

Examples: GDPR and data protection, AI regulation (EU AI Act), employment law changes, consumer protection legislation, antitrust actions against technology platforms¹³.

E - Ethical Factors

Definition: The moral and values-based expectations beyond legal compliance.

Key Questions:

• What governance standards (board diversity, executive pay) are expected?
• How are supply chain ethics (labor practices, modern slavery) scrutinized?
• What data ethics concerns (algorithmic bias, privacy) apply?
• What broader corporate social responsibility expectations exist?

Examples: ESG (Environmental, Social, Governance) investing criteria, supply chain transparency demands, AI bias and fairness concerns, anti-corruption measures, stakeholder capitalism expectations¹⁴.

Framework Variants

STEEPLE exists within a family of related acronyms, each suited to different analytical purposes:

The choice between variants should be driven by context. A startup may only need PEST; a multinational pharmaceutical company likely requires full STEEPLE or STEEPLED analysis¹⁵.

How to Use STEEPLE

Workshop Process

A robust STEEPLE analysis typically follows a structured workshop format:

1. Scope Definition

• Define geographic and temporal boundaries
• Clarify whether analyzing a product, business unit, or entire organization
• Establish time horizon (typically 3-10 years for strategic planning)

2. Brainstorming and Data Gathering

• Participants identify factors under each STEEPLE heading
• Use diverse cross-functional teams to mitigate blind spots
• Gather both qualitative insights and quantitative data

3. Prioritization

• Plot factors on an Impact/Uncertainty matrix
• High Impact / High Uncertainty factors become candidates for scenario planning
• Focus attention on the “critical few” rather than exhaustive listing

4. Cross-Impact Analysis

• Map how changes in one factor influence others
• Recognize that STEEPLE factors are interconnected, not siloed
• Example: AI (Technological) → automation/job loss (Economic) → inequality concerns (Social) → populism (Political) → AI regulation (Legal)

5. Strategic Implications

• Translate observations into actionable insights
• “Inflation is rising” is observation; “We must hedge currency exposure” is strategy

Integration with Other Methods

STEEPLE works best as part of a broader foresight toolkit:

• SWOT Analysis: STEEPLE feeds the Opportunities and Threats quadrants
• Futures Triangle: STEEPLE identifies the “Push of the Present” forces
• Causal Layered Analysis (CLA): STEEPLE operates at the Litany and Systemic levels; CLA goes deeper to Worldview and Myth
• Three Horizons: STEEPLE defines Horizon 1 (current state) and identifies Horizon 2 disruptors
• Scenario Planning: High uncertainty STEEPLE factors become axes for scenario construction¹⁶

Wind-Tunneling Strategies

The ultimate validation of STEEPLE analysis is “wind-tunneling”—testing strategies against STEEPLE-derived scenarios:

“Does our growth strategy still work if the Political climate turns protectionist AND the Technological landscape shifts to quantum computing?”

If a strategy fails in multiple scenarios, it is fragile. If it survives, it is robust¹⁷.

Comparison with Other Frameworks

Limitations and Critiques

Methodological Challenges

Static Analysis Risk: STEEPLE can become a snapshot exercise rather than dynamic monitoring. Effective use requires ongoing scanning, not one-time workshops¹⁸.

Siloed Thinking: Treating factors as independent categories misses the systemic interconnections that often matter most. Cross-impact analysis helps address this limitation.

Prioritization Difficulty: The framework generates extensive lists but provides limited guidance on what matters most. The Impact/Uncertainty matrix helps but remains subjective.

Cultural and Epistemological Critiques

Western Bias: STEEPLE emerged from Western management thought and assumes linear time progression (past → present → future). Non-Western temporal understandings (cyclical, ancestral) may require different frameworks¹⁹.

Categorical Separation: Separating Environmental from Social reflects a particular worldview. Indigenous epistemologies often view nature and people as indivisible, which standard STEEPLE may miss²⁰.

Postnormal Challenges: In an era characterized by chaos and complexity, STEEPLE’s categorical approach may struggle to capture simultaneous, contradictory dynamics²¹.

Best Practices to Address Limitations

1. Use STEEPLE as starting structure, not final output
2. Always conduct cross-impact analysis
3. Integrate with deeper methods (CLA) for worldview examination
4. Include diverse voices, especially from affected communities
5. Treat as ongoing process, not one-time exercise

Conclusion

The STEEPLE framework, evolved from Aguilar’s 1967 ETPS through decades of practitioner refinement, remains the foundational taxonomy for macro-environmental scanning. Its longevity reflects both flexibility and categorical logic: to understand the organization, one must understand its ecosystem.

Effective use in the 21st century requires moving beyond static checklists toward systemic analysis that recognizes factor interconnections, integrates with deeper foresight methods, and remains humble about the limits of categorical thinking in complex times.

The framework does not predict the future. It illuminates the landscape, allowing practitioners to navigate uncertainty with greater clarity. STEEPLE is not the answer—it is the structure of the question.

References

Additional Resources

• UK Government Futures Toolkit
• CSIRO Our Future World Megatrends
• Singapore RAHS Program