One on the tools that every budding business management student thinks they are familiar with is the SWOT analysis. Below we take a fresh look at its potential and how it’s misused.
Strengths – Weaknesses – Opportunities – Threats
Familiarity with SWOT has bred misuse. We often see it being used to simply capture obvious statements that are no use in driving a new strategy conversation or a new direction for the organisation. And if we were given £1 for every time we saw “Our people” in the Strengths box we would have enough to buy our every own iPad. Equally, we’ve never seen “Our people” in the Weaknesses box. These kind of trite statements waste everybody’s time.
First principle of a good SWOT is about data organisation. Strengths and Weaknesses should focus on Internal factors, Opportunities and Threats focused on External factors.
Second principle is about motivation. SWOT should never be done to make a team feel good about itself. An effective process should be provocative, stimulating, even controversial. The best ones contain real insight that makes for exciting/painful reading.
The next thing that makes a SWOT really come alive is how the data is used to drive decisions. We use a couple of additional boxes to help facilitate that process as shown below:
Used in this way the SWOT becomes much more dynamic. The External Environment is forced to interact with the Organisational Capabilities which produce a synthesis of Critical Issues and Promising Potential. It’s these two dimensions, when brought together, that begin to form some interesting strategic/competitive ideas.