A critical read about your organization’s future in three parts
It’s Time to Upgrade Your SWOT! — Part One
A Traditional Tool for Planning and Change
by Rob Brodnick, Larry Goldstein, and Don Norris
Executives and strategists have a long history of utilizing the SWOT framework to guide planning efforts. From the initial assessment and scanning activities to the later development of actions to better position the organization for the future, much of traditional planning hinges on the SWOT. But as we’ve seen, traditional planning is being stressed by our VUCA world — volatile, uncertain, complex, ambiguous — rife with forces that increasingly make our traditional tools far less potent. Luckily, yet not without significant effort, new tools continue to emerge that better respond to the changing conditions in our ecosystems. The SWOT has aged, and not necessarily gracefully. And if you rely on a SWOT for your organization’s future choices, you are especially vulnerable.
“It’s time to upgrade your SWOT!”
The story is coming to you in three parts. Here, the authors review the history of the SWOT, describe its components and functions, then go on to discuss its usage in planning and organizational change efforts. Parts Two and Three will arrive in the coming weeks. I am writing with Larry Goldstein and Don Norris. We recommend you get out of your box. Read on to learn more…
What is a SWOT? Any meaningful planning effort has to include at least three components: learning from the past, understanding the present, and driving into the future. Various tools, activities, and processes support each of the three components and this article focuses on one activity used to support planning, the SWOT analysis. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. As further explained below, each term addresses one of the critical elements of an organization’s recent performance as well as current status and near-term plans and actions.
Strengths and weaknesses tend to be viewed through an internal lens focused on the organization itself while opportunities and threats tend to be viewed as factors external to the organization. In this context an organization’s strengths are the assets, both tangible and intangible, available to an organization as it readies to address its future. These assets can take many forms including financial and physical resources; successful programs, products, and services; and those less tangible such as reputation, human talent, location, etc. What they all share in common is their susceptibility to be leveraged for the betterment of the organization and the outcomes it produces. They can be viewed as enablers that can be deployed to take advantage of the organization’s available opportunities, overcome its weaknesses, and respond to or mitigate threats the organization is facing.
It is common to see SWOT depicted as a four-box grid as shown below, where four quadrants are created, one for each component of the SWOT to house the results of the analysis.
Weaknesses are not necessarily the flipside of an organization’s strengths but they do represent factors that can inhibit an organization’s pursuit of successful efforts. Weaknesses can be both failings as well as capacities that simply have not been acquired or well developed so far in the organization’s evolution. There also is the reality that a strength used to excess can turn into a weakness. It’s a fine point, and for our discussion we are focused on strengths that are used appropriately toward establishing or enhancing organizational success. Examples of weaknesses we often see include a lack of focus and vision, an inability to collaborate effectively, unhealthy internal competition, poor communication, lack of needed talent, etc. Some of these — lack of focus or unhealthy competition — can be eliminated reasonably quickly with appropriate management awareness and corrective action. Others such as lack of collaboration skills or talent take time to address and require intentional intervention. Developing skills or adding resources of any type typically takes longer than eliminating counterproductive effort.
Opportunities are those potential areas of future endeavor, often found external to the organization that, when pursued and leveraged well, will lead to increased success. They differ from strengths as strengths fall within the direct control of the organization’s control, while opportunities require the organization to engage with its environment to a high degree into areas not fully within its influence. These require partnership and collaboration. Opportunities take various forms including new lines of business, adjacent markets, agreements and relationships with partners, access to resources not fully realized, and on and on. The key characteristic of opportunities is their potential to take the organization in new directions to help build on or establish new successes.
Once again, threats are not the direct inverse of opportunities. They are similar to weaknesses in one sense; they have the potential to impair the organization or prevent achievement of successful outcomes. The key distinction between threats and weaknesses is that the latter typically can be well identified and understood. This doesn’t mean that they can be addressed easily but there can be less mystery about them. Similar to weaknesses, some threats can be easily identified and understood, but others emerge with little to no advance notice and can be difficult to anticipate. Examples of threats include the potential loss of access to a line of credit, political instability, introduction of regulations adverse to current or planned operations, raids on the organization’s workforce by competitors, etc. Similar to opportunities, which are outside the control of the organization, threats tend to be beyond the organization’s direct influence, and as such, they lend themselves to mitigation rather than complete elimination.
Strengths and opportunities are generally considered helpful and weaknesses and threats harmful. In the grid, strengths and weaknesses are depicted as internal factors, while opportunities and threats are external.
How Do Organizations Use a SWOT? Although our discussion so far focused on planning, and in our experience it has been seen as a planning tool, the SWOT also can be applied to problem solving, change and organizational development, or innovation processes. A key element of strategy and planning is the attainment of an improved state. No organization engages in planning to make things worse. In the same way in which planning is focused on improvement, change management and organizational development seek to alter the current state through intentional processes and efforts to achieve different results. The SWOT is a flexible tool that can be adapted to focus on parts of the organization, to specifics of the change being contemplated, or to the organization as a whole.
We often see the name SWOT followed by the word analysis, and it’s safe to say that most applications of SWOT techniques tend to be analytical, seeking data that is later organized into the four SWOT categories. In its simplest form, we’ve seen SWOTs facilitated in a half day session. For example, a team leader or facilitator stands at a whiteboard or easel and asks the room, “share with us the things you consider our team/company’s strengths and weaknesses”, and they are written down. Once the ideas slow down, they are clustered and consolidated and written in their respective quadrant. The process repeats for “things acting on us from our environment” and they are then written down, clustered, and plotted. What results is a basic SWOT analysis based on what is on people’s minds that day.
Most traditional planners and leaders take the next obvious step by forcing connections among the quadrants in their analysis. The simplest technique is to pair up the quadrants to create actionable tactics and actions, thereby linking internal dynamics and plans to the organization’s external circumstances and forces. The strengths-opportunities pairing leverages internal strengths to take advantage of opportunities in the external environment. The strengths-threats pairing utilizes strengths to mitigate threats. The weaknesses-opportunities pairing reveals areas for focused improvement in weaknesses to take advantage of opportunities. The weaknesses-threats pairing helps organizations to work to eliminate weaknesses to avoid threats. The figure below shows a depiction of how tactics and strategies are formed using a SWOT.
How Do Organizations Conduct a SWOT? A SWOT can be a useful tool in the hands of professionals, yet at the same time, we have often seen unskilled managers grab a marker and whiteboard and try to lead an organization through the construction of a SWOT framework. The results of a sloppy SWOT can be disastrous for an organization by generating faulty assumptions, incorrectly identifying and miscategorizing strengths and weaknesses, or being overly generous about opportunities and understated about the threats. We recommend hiring an expert to assist.
Regardless of who facilitates the process, there are a number of universal steps along with an endless number of variations when conducting a SWOT. It’s primarily an analytical process that includes hints of intuition. In more advanced applications, the concepts of forecasting are as essential to success as are wizened foresight. We do however recognize the following as core to any kind of SWOT. Step One — define the problem and set boundaries. Step Two — collect data and categorize the results into the grid quadrants. Step Three — consider the validity of the results and make adjustments. Step Four — move from analysis to action planning. Step Five — take action and monitor results.
Tune in soon for Part Two: Limitations of the traditional approach. We’ll open with a discussion of the context of the near-term future of our ecosystems. In Part Three, the authors build a case for improving the tool and concludes with a number of specific suggestions and upgrades, especially the internal SWOT components of strengths and weaknesses using more expansive and robust tools.
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Rob Brodnick, Ph.D. is a strategist and innovator. He founded Sierra Learning Solutions as a platform for his work to help organizations learn and change. Recently he published Innovations in Strategy Crafting, a book that is filled with applicable tools and provocations for anyone seeking to create their own futures. Rob writes on Medium and publishes about two articles each month. He also helps guide and facilitate the AMI innovation learning community. He welcomes feedback, inspiration, or requests for assistance; write to him at rob@sierralearningsolutions.com.
