Principles that make life easier

2.1. The Importance of a Strategic Approach

You probably bought this book because you want to make your life easier, more meaningful, more fulfilling, and more enjoyable. You want to use your creativity productively, learn something new, create something you enjoy, and perhaps share your experiences, as I'm doing right now or through collaboration with others.

But to achieve all of this to the fullest, it's important to start from the very beginning:

1. Understand who you are – define yourself;

2. Understand what you want, your goals;

3. Assess your situation;

4. Assess your resources and the resources you can attract.

5. Assess your physical and mental health – after all, this is your most important resource;

6. At the intersection of all of the above, understand your strengths and weaknesses, opportunities, and threats.

7. Develop a core strategic plan and tactical measures for its implementation – the objectives.

Everything listed above is called strategy, and it applies to any subject.

Ignoring any of this won't work, otherwise you'll end up in the wrong place, using the wrong methods, suffering, losing energy and other resources, and ultimately, being unhappy and living in a state of stress.

Anything that hinders you from implementing your strategy or on your life path will have to either be changed or eradicated, or accepted as is and your strategy adjusted.

2.2. Self-determination (mission or purpose)

Self-definition, or the recognition of who you believe you are, or, in other words, your mission or purpose, is subject to change. It depends on your age, the situations and experiences you've experienced, your knowledge, your available resources, and so on. Therefore, the process of self-definition should be ongoing, and at least once a year, you should reassess what you truly strive for, as you may realize you've chosen the wrong life path.

So, set aside sufficient time, find a quiet place free from distractions, and engage in self-discovery using some of the recommendations and methods listed below:

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Answer the question: "What am I willing to do and even pay for?"

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Answer the question: "What from my previous activities will remain if I get rich?"

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Answer the question: "What have I always wanted but was afraid to try? Maybe this is my calling?"

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List all your talents and abilities in as much detail as possible, identifying the primary and secondary ones, and clearly defining them all. Focus on the most important ones, as well as those without which you wouldn't be interested in living.

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Ask yourself what will happen when the goal is achieved. Will achieving it bring pleasure, and will it make you happier? Try to clearly imagine the outcome of your chosen goal in advance, so you can feel what it will be like to achieve it, right down to the sensations in your body.

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Choose famous people you admire and try to understand why. It's likely that you are drawn to them by something you deeply desire. Make lists of things or activities that fascinate and energize you—as broad as possible—and then rank their contents. This will allow you to better see yourself in all of this, understand your inclinations toward certain activities, and determine which direction to take.

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To understand your purpose, ask people in your circle or friends who have known you for years to answer a series of simple questions: "What is valuable about me? What can I do that you enjoy? What can I do better than others?" Outside opinions are invaluable. For example, my personal experience has given me this idea of myself: someone who takes on new and unfamiliar challenges and sees them through to completion. Consequently, I've developed a leadership career in the development and implementation of various projects in manufacturing, construction, and trade, with a little bit of literature—and working with texts has accompanied me throughout my career, necessary for business correspondence and solving complex problems.

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A person's caliber is determined by the size of the problems they can handle. What challenges are you drawn to? Maybe you've long wanted to write laws or organize ascents to Everest, and not all this?

Write in the comments to this book what idea of yourself you were able to form by using these methods, and which of them turned out to be closest to the truth.

2.3. Principles of a strategic approach

The strategy should contain:

1. An answer to the question "Who am I?" and "What is my calling?"

2. Answers to the question "What do I want?"

3. A list of goals.

4. A SWOT analysis, or an analysis of strengths, weaknesses, opportunities, and threats, including an analysis of one's own capabilities, abilities, and resources, as well as an analysis of the situation (external environment) and the prospects for change, in order to develop a strategy. We'll discuss this in more detail in Section 2.4.

SWOT analysis (the acronym stands for Strengths, Weaknesses, Opportunities, and Threats) is presented as the most common and one of the best options for strategic analysis, but it is not the only one. Consider other methods, which will also be described in general terms later in the text in Section 2.4.

5. An action plan, including a list of tasks that take into account the results of the SWOT analysis and other methods.

6. Next, typically for organizations, a structure and operational plan are developed (what the company actually exists and how it functions), a marketing plan (a plan for market behavior, taking into account competitor analysis, etc.), a financial plan is drawn up, accounting for expenses and income (cash flow), investment needs are determined, and the planned payback period is calculated. Only then is the plan implemented. We will also consider all of this below, but in a slightly different context, applicable to individuals and primarily to simplify their lives.

If you have never developed a strategy in this way before, after going through all the stages, you will likely see things you hadn't noticed before—especially new opportunities. This is largely why all this work is necessary. It is a valuable and necessary experience. Having learned to think strategically and apply strategic planning methods in your work, you may make strategic planning your life's work or profession.

During strategic analysis, it is also useful to conduct the following activities:

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Compare resource needs with what's available based on ongoing inventory;

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Understand what's missing and in what quantities;

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Understand how realistic it is to obtain what's missing;

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Replenish any unavailable or insufficient resources yourself. If we're talking about production capacity, you can compensate for the shortfall with a second work shift. And if it's still insufficient, then you should consider attracting loans (that's a nasty word), investors, or co-owners to the business.

We will consider the main issues related to effective planning in Section 3. “Planning your affairs is half the battle.”

2.4. Methods of strategic analysis and decision making

SWOT Analysis

SWOT analysis is a strategic analysis technique based on the creation of a matrix (Fig. 2), according to which it is necessary to use your advantages (strengths) and positive factors (opportunities), but at the same time it is necessary to minimize the risks associated with your vulnerabilities (weaknesses) and the negative influence of the external environment (threats).

Pic. 2. SWOT analysis algorithm

For example, having a unique technology or product is a strength. Growing demand for solutions to the problems your technology is designed to solve is an opportunity to sell more and earn more. However, if you have unstable production, high costs, or insufficient resources for production, this is a weakness that will hinder you. Competition is also a factor, as is the threat that competitors will develop a better product than you and ultimately overtake you, taking away your market share.

In general, SWOT analysis is a fairly flexible method. It allows you to analyze both the situation as a whole and specific parameters, such as the level of training of your staff compared to your competitors, the material and technical resources of yours and your competitors.

Based on all this, you need to consider how to plan your next steps.

In relation to a person, their strengths or weaknesses can be, respectively:

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Education or lack thereof;

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Work experience or lack thereof;

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Connections or lack thereof;

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Transportation or lack thereof;

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Loan repayments or lack thereof;

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Health status or physical limitations;

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Specific professional skills or lack thereof.

Also, in relation to a person, opportunities or threats for him are such factors of the external environment as:

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Economic growth or decline;

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Price declines or increases and inflation;

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Declines or increases in the central bank's key interest rate and borrowing costs (loans are generally terrible – never take them);

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Increased or decreased demand for workers in your specialty;

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The number of specialists in your specialty – the more there are, the worse it is for you;

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Excess or shortage of goods "on the market";

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Etc.

Your next task is to figure out how, based on this analysis, to best utilize all your capabilities to fit into the existing reality, extract maximum benefit from it, and move closer to achieving your goals.

The main thing to remember is that while thinking about yourself, don't forget to consider the needs of the society in which you live. Its state will ultimately determine your opportunities and threats, and literally every person has an impact on this. Also, remember that the goal isn't money; money is simply a means or a way to evaluate various types of resources—nothing more.

PESTLE‑analysis

Метод оценки внешней макросреды, включающий шесть ключевых групп внешних факторов (укрупнённо базовых и расширенных):

1. Базовых:

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Политические (стабильность власти, регулирование экономики, торговые соглашения);

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Экономические (темпы роста ВВП, инфляция, курсы валют);

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Социальные (демография, ценности, образ жизни);

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Технологические (инновации, цифровизация, автоматизация);

2. Расширенных:

Правовые (законы, стандарты, трудовое право);

Экологические (экологические нормы, устойчивое развитие, ресурсоэффективность);

Этические факторы;

Отраслевые;

Местный, национальный и глобальный уровень перечисленных выше факторов.

PESTLE‑анализ позволяет выявлять возможности и угрозы, корректировать стратегию с учётом внешних трендов.

SWOT-анализ по сравнеию с PEST-анализом:

SWOT-анализ учитывает и внешние и внутренние факторы, а PEST – только внешние;

SWOT-анализ показывает сильные и слабые стороны продукции или предприятия, возможности и угрозы для него, а PEST – влияние политических, социальных и технологических факторов.

SWOT-анализ решает вопросы развития и адаптации предприятия, а PEST – выявляет риски и угрозы.

PEST‑analysis has six extended modifications:

1. SLEPT (Social, Legal, Economic, Political, Technological)

This modification of the basic analysis complements the legal factor. It aims to assess a company's activities through the lens of legislation: current regulations are studied and changes in the legal environment that impact companies are forecasted.

2. PESTEL (Political, Economic, Social, Technological, Ecological, Legal)

This model complements the standard PEST analysis with two components:

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legal, similar to SLEPT;

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environmental, taking into account environmental trends and requirements.

PESTEL's relevance is growing due to the spread of green marketing and companies' desire to demonstrate environmental responsibility.

3. PESTELI (Political, Economic, Social, Technological, Ecological, Legal, Industrial)

This is an expanded version of PESTEL, incorporating the Industrial factor. It focuses on industry specifics: current trends, the competitive environment, and potential changes that could impact a company's position in its segment are analyzed.

4. STEEPLE (Social, Technological, Economic, Ethical, Political, Legal, Ecological)

The model combines the PEST elements with three additional factors:

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Legal;

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Ecological;

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Ethical.

The so-called "ethical" element assesses the extent to which a company's actions align with moral norms and social expectations. For example, it analyzes whether a company's strategy touches on sensitive socially significant topics that could trigger "cancel culture"—a sociopolitical phenomenon in which an individual or company is subjected to widespread condemnation and deprivation of support at various levels of public and professional circles—both online and on social media, and in real life.

5. PESTEELI (Political, Economic, Social, Technological, Ecological, Ethical, Legal, Industrial)

This model is the most comprehensive version of the PEST analysis, combining:

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Basic PEST elements;

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Legal;

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Industrial;

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Ecological;

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Ethical factors.

Thus, PESTEELI covers the broadest possible range of external influences on business.

6. LONGPEST (Local, National, Global PEST)

Unlike standard PEST, which typically focuses on the regional or national level, LONGPEST examines the same factors (Political, Economic, Social, and Technological) at three scales: