A critical read about your organization’s future in three parts
It’s Time to Upgrade Your SWOT! — Part Two
Our Future Presents a Problem
by Rob Brodnick, Larry Goldstein, and Don Norris
SWOT has widespread applicability and utility but it also has inherent limitations.
From what we have seen in many instances, SWOT analysis leans toward the subjective and is burdened by the participating individuals’ perspectives and biases. Although this can be limited to some degree by including large numbers of individuals from different parts of an organization, the outputs then need to be organized and analyzed by facilitators who themselves are burdened by their own biases. There are various mechanisms and approaches used to conduct a SWOT analysis, but a common challenge is to understand and appropriately weigh the forces. Most SWOTs weight strengths and weaknesses on the frequency with which individual responses occur. If 50 people participate in a single SWOT analysis activity, and 20 of them mention X with no other item being mentioned more than five times, it will be presumed that X is a legitimate example of a strength, weakness, opportunity, or threat — even though X may also show up in a competing category. Stated differently, it’s not uncommon for some individuals to identify X as a strength while others view the same item as a weakness. We see many SWOTs run askew at this point.
A second failure point in the traditional process is that the activity itself does not result in any prioritization of actions. Even a vote cast by members of the leadership team can be helpful for confirming legitimacy but this kind of popularity contest does not always signify strategic importance. In other words, just because an individual item is mentioned often does not mean it should be viewed as the most important element. Compounding this is the possibility that large numbers of items may appear in the analysis with no data to back up their inclusion. Rarely does a SWOT include the feasibility testing required to move from idea to action.
In our experience, while your organization’s managers and leaders know your organization well, they are not professionally trained in organizational diagnosis and produce biased assessments of your organization’s strengths and weaknesses. Managers by nature defend their functional areas and their resource pools and have trouble collaborating around shared vision. Their organizational knowledge can become a liability when it creates blind spots that impede improvement. It can be particularly challenging to conduct an audit of the organization from the inside out because it is difficult for members within the organization to view it objectively and with various lenses that highlight its unique features.
All but the most astute organizations lack the capacity to conduct environmental scans that are deep and thorough enough to produce a good list of external forces, understand their relative magnitudes and vectors, and interpret the most important signals in all of the noise in our environments. It is human nature to maintain a particular perspective about our world view, but this limits one’s ability to recognize unseen forces and to predict changes that will affect our organizations. SWOT provides a template for starting the conversation, however the template itself doesn’t encourage users to question the results. In short, it does little to strengthen our understanding of the depth and breadth of our organization’s unique make-up and potential.
But perhaps the biggest risk in applying the traditional SWOT is the turbulent nature of our organizations’ environments, the ecosystems in which we are embedded.
What’s in Store for Our Ecosystems? SWOT needs to adapt to the endlessly complex environments of the 21st Century, which presents different opportunities and threats than those we faced in the 20th Century. Addressing these external factors will place higher value on different kinds of organizational capacities, competencies, and activities than have traditionally been the keys to success. New tools of organizational diagnosis and strategic thinking are emerging. The manner in which we will use 20th Century planning tools like the SWOT to guide strategies, interventions, and initiatives is evolving. Let us describe a few of these new complexities then go on to recommend how we must upgrade the SWOT to respond.
New reality one: we are using an old vocabulary that increasingly fails to describe our organizations.
The strengths and weaknesses organizations are accustomed to analyzing are more multifaceted than ever. Traditional, quality and excellence-based measures are declining in utility, whereas practical outcomes recognized by individual customers, employers, and society at large are coming into use. We need a much finer point for the terms and definitions we use day in and day out. Our words, especially those of our leaders, create the way our organizational members understand our organizations. By simply upgrading the vocabulary, we could help share a better understanding for the future.
New reality two: it is getting very personal.
Like it or not, the last several generations of consumers and now managers see their world as interdependent. Everything must be personalized. Simply selling a sneaker won’t cut it, and just selling a sneaker with a logo won’t work either. Now we need to provide the opportunity to custom build a sneaker that represents our personal identity that also meets the needs that our activities demand. Individuals, while everso influenced by marketing messages, are now demanding they receive personal value from even the smallest investments they make. It’s not just what’s judged best, but what’s best for me. Organizations must now consider user experiences and social media perception and this requires how innovative design practices can reinvent existing programs and create new ones that fulfill changing value propositions. Strategic thinking has endless new datasets to consider, deep and personal engagement is required, and leadership has been redefined. The SWOT never accounted for this worldview.
New reality three: the world is moving toward outcomes and value and away from inputs and assumed reputation.
In one sense, we are getting to be more educated about the things we buy, the experiences we expect, and the value an organization or brand produces and represents to us. We trust old brands less and instead talk about new ones based on what they do for us or what kind of mindset a brand portrays that we wish to associate ourselves with. These alternative value propositions have implications on the learning organization’s ability to attract and generate financial resources. The traditional approach of the exchange of dollars for products and services will need to be reinvented in order for organizations to achieve financial sustainability. Likewise, public and private support routes must be reconsidered and new business models created to incorporate additional revenue streams and added value. New collaborations and partnerships can attract expertise and funding needed to generate new net revenues.
New reality four: organizations are not machines, yet our management behavior still assumes they are.
The impacts of the industrial age are ever present doing great harm to our future. Just look around. An educational system designed to produce farmers and factory workers. Governments designed to serve party politics not citizens. Environmental practices that support wealth accumulation and not the health of our planet. And, managers that try to fix organizations as if they are engines or assembly lines. The organization’s ability to leverage its existing strengths to tackle the forces of the future depend upon its internal capacity to utilize resources and relationships effectively. In the recent past, executive leaders had to establish a vision and strategy, then mobilize human and other resources to fulfill the established mission. 21st Century leaders require additional expertise in refining organizational purpose, achieving defined value and impact, and establishing financial sustainability.
Required SWOT Upgrades. Future-oriented executives and planners must consider their organization’s capacity to transform to meet the dynamic landscape of tomorrow. Conventional SWOT analysis relies on the skillsets and perspectives of those team members in the room with most of them looking to the past to understand their futures.
But how does a leader know if there are gaps in their team’s skillsets and blind spots in their perspectives? Whose talents and voices are absent from the process? How can a leader be certain that the right problems are under discussion? SWOT analysis in its current form does not address these questions. A new framework is needed to upgrade SWOT and provide the insight executives need to lead the evolution of their organizations into the 21st Century.
Upgrade One: the SWOT’s lens on organizational capabilities is limited to strengths and weaknesses — we need a more robust framework that has the granularity to help organizations transform and strengthen.
We contend that all organizations seek to strengthen themselves, in mission, in service, in outcomes, in profitability or financial sustainability, and in many other ways that match their purpose. They need to transform and strengthen the organization by enhancing existing capacities and outcomes and transforming processes, products, services, and experiences through more aware analytics, better engagement, and relentless innovation. The traditional SWOT lens has insufficient detail to get to the things that matter most.
Upgrade Two: the SWOT is biased toward analysis, not action — we need to create change through collective effort and engaged action.
Organizations need to continually be aware of their internal dynamics and external environment. They also need to translate that awareness into collective action that will strengthen and transform the organization. In order to move an entire organization, there needs to be collective organizational effort, motivating collaborative activity and synergy across the organization. The traditional SWOT does not naturally lead to collective effort and provides a limited analysis on which to hang future action. We have often seen organizations stymied by analysis paralysis.
Upgrade Three: the SWOT forces us to think of our organizations as machines and to see our environmental forces as either opportunities or threats beyond our control. We need to view our organizations as living systems in continual dynamic interaction with our ecosystems. We need a new vocabulary and definitions to measure and improve our organizations.
We’ve seen strategies that have emerged from SWOT analyses have a difficult time getting traction in the real world. Understanding that organizations are more organic than machine-like allows us to blur what is believed to be internal and what is believed to be external and better connect our organization’s impacts on our world to its internal capabilities. The traditional SWOT uses a vocabulary better suited for the industrial past, not the VUCA present nor the interdependent future.
Part Three that follows offers a new framework to respond to the new realities and our recommended upgrades.
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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.
