SWOT – Serious Waste of Time?
Anyone who has worked on a business plan (or a strategic plan) is familiar with the famous SWOT. This time-tested building block of strategy is often misunderstood and maligned, particularly in smaller businesses.
First, a SWOT is a snapshot view of your current situation as an organisation. This means that it reflects a particular time/stage/market you are in and therefore will change over time. Your Strengths and Weaknesses are Internal factors to your business, while the Opportunities and Threats are External factors to your business.
So how do create one? Here is a starting point of questions you can ask yourselves to start:
Strengths – Internal
- What do you do well that others in your field do not?
- What are those structural things (systems, people) that bring you success?
- What internal aspects of the way you do business that your clients appreciate?
Weaknesses – Internal
- What are the things you need to improve (reduce risk)?
- What structural things (systems, people) are preventing you from succeeding?
- What is going to get in your way to reach the next level?
- Do you have people or systems that have no back-up or redundancy?
Opportunities – External
- Is there a disruption in the world/market that is creating new ways of doing business (think Covid)?
- What trends do you see in the market that you could take advantage of?
- Are there needs that your clients have that are not served in the market?
- Do you have a product or service that is uniquely positioned in the market?
Threats – External
- Is there a disruption in the world/market that is creating new ways of doing business (think Covid)? Note that this is the same question as above!
- Are there emerging technologies that may negatively impact you?
- Do your competitors have products or services that you do not?
While there are other tools you can use as a business leader to assess your situation (with their own advantages), the SWOT remains an effective planning tool. Like any tool, however, it is only useful if you use it properly! Here are some guidelines on how to make the SWOT work for you:
- As mentioned above, your SWOT is a snapshot in time. This means it needs to be revised as business conditions change.
- Take the time to reflect on your Strengths & Weaknesses. Be honest with yourself. Challenge the assumptions and possible blind sides you may have.
- Ask others (your clients?) to give you this feedback. You may be surprised what you learn.
- Take time to reflect on the market (and potential market) out there. Brainstorm possibilities by stretching your imagination. You can critique these ideas later.
- Consider using a neutral third party to workshop your SWOT with you – someone who will challenge your assumptions.
Perhaps most importantly, use your strengths and weaknesses to develop strategies and tactics to target your opportunities and mitigate your threats. This is not an academic exercise but should produce concrete real-world action plans!
A SWOT analysis is only a serious waste of time for your business if it doesn’t reflect where you are right now, if you’re not candid in your assessment, and if you don’t use it as a roadmap to move forward. Otherwise, it can be a very useful tool to develop your strategic direction!