The SWOT analysis... one of the most important items in your toolkit.

I imagine that most of you have had some exposure to a SWOT analysis. If not, it is one of the most important practical tools you will use throughout your career, so get to know it early. The SWOT analysis framework was invented in the 1960’s and is a long established, strategic planning technique, practiced by organisations of all sizes. It is also a critical tool for risk management and governance teams. Usually presented as a four box matrix, the intent of the framework, is to draw out the strengths, weaknesses, opportunity and threats, of an organisation. Typically the analysis process would include a mixed group of people, relevant to the level or type of SWOT being undertaken. The critical element is that there is diversity of thought, experience and skills in the group, ensuring a robust session and broad information gathered.

The success of any organisation is strongly influenced by the quality of its strategy. To create an impactful strategy, you must understand the organisation and the external environment deeply. The SWOT framework ensures a structure and focus for this deep dive, into these four key areas and informs the internal and external environment. Essentially creating a start point and current position, the information enable’s the development of the organisational strategy and priorities.

Sound simple? The exercise itself is relatively simple, however ensuring the depth and quality of actions drawn from the activity can be challenging. In a busy environment it can be easy to undertaken the process as a “token” exercise – something that is required to be done, rather than delve deeply. What happens if there is no depth? Will basic/generic information gathered support a strategy with real impact or a competitive advantage? I think we all know the answer to that is No!

So you have now been involved in an enthusiastic brainstorming session. The team has many insights, including a number of new factors, which have only become visible in the last 6 months. Now what?

You are now at a critical juncture. If this information is just used to validate what is known, or is captured as information and then tucked away as a document to gather dust, what was the point?

This next important phase of the process is where each of these elements is tested and challenged.

When we think of a “strength”, rather than just agree this is a strength, it needs to be questioned. Will the strength become a weakness if we become complacent or are arrogant, or don’t innovate? Is this a sustainable strength or is it a strength because we don’t have a current strong competitor right now? What if that changes?

Where there is a threat, rather than only trying to remove it, can we turn it into an opportunity? New market disruptor's are a perfect example. Does partnering with the disruptor, rather than fighting against them, create an opportunity?

After completing this second stage of the process, it is time again to lift eyes. Consider all of this information and narrow the focus to priority items, that will take the organisation into the future.

From here the broader strategy and priorities will be developed. Tactical actions will fall under these, resulting in a living document and a clear path forward, supported by well considered rationale.

So the next time, or the first time you are involved in this process, think deeply and challenge yourself and the group as to how you approach and work with these four quadrants. Make some time to play around with this on your own. Create a SWOT for your division or your business. What is that weakness that can be turned into a strength? What is that strength that can be further strengthened to distance yourself further ahead from your competitors or what new strengths can be developed?

A really interesting exercise is to find a SWOT analysis, undertaken by the business 10 years ago and compare this to the same exercise right now.

I also suggest that you take a step back to my “Strategy – something for someone else to worry about?” (15/5/20) and “What if….?” (28/5/20) posts. I think you will find this extra content will help in joining the dots, when considering strategy more broadly.

There are of course other tools and frameworks used in developing strategy, which I will cover in a post soon. I felt the importance of the SWOT analysis framework called for individual attention.

Finally there is one book, Strategic Management Thinking, Analysis &Action by Graham Hubbard, that everyone should own a copy of, if possible. I have had mine for as long as I can remember and I continue to reference it at times. If you don’t wish to purchase it, I can almost guarantee, someone you know, will have a copy for you to borrow.

As always please do not hesitate to contact me if you have a question or would like some help. Until next time Lisa