Key External Factors – Management Guidelines

We are not the makers, we are the takers. For corporate management, it means that your company is like a sailboat that needs to know and take advantage of all winds and currents to get safely and rapidly to its destination – aggregate value maximization (transforming your company into a happy one and keeping it that way).

These ‘winds’ and ‘currents’ that need to be used by corporate objects – products, brands, clients, assets, etc., are your key external factors (KEF): political, macroeconomic, social, cultural, technological, environmental, industry-specific, etc.

To be able to skilfully navigate your ‘corporate boat’ in often rough ‘currents’ and ‘winds’, you must first identify them. In other words, develop a comprehensive KEF list for your company. Second, you must accurately forecast the dynamics of each KEF (such as GDP, inflation, exchange rates, political stability, etc.). As well as opportunities, threats and risks presented by the KEF in question. Always keeping in mind that even a threat or a risk is an opportunity in disguise.

And, finally, you must align your strategies, unique value propositions, brands, products, stakeholders, operational infrastructure, etc., with forecasted KEF dynamics. To take advantage of opportunities, avoid threats and optimize risks presented by your KEF.

To achieve this objective, you must develop a comprehensive, well-structured, logical and easy-to-use description of your KEF system (portfolio). As well as a highly efficient business process for KEF monitoring. Which, in turn, requires a highly competent KEF monitoring specialist (in-house); a comprehensive KEF knowledge base and possibly even KEF forecasting tools. 

Plus, you need to have a reliable and efficient alert system that informs key decision-makers in your company about sudden KEF changes that might produce a significant effect on your corporate KPI. 

And, definitely, corporate KEF need to be used – on a permanent basis – in the process of making both strategic and operational corporate decisions.