Opportunities and threats do not exist
When I was fairly fresh out of business school I was asked to prepare a strategic business plan for a half billion dollar pan-European technology services business.
The sector was undergoing a lot of change, both in the technologies being used and the way these were being delivered. The needs of the customer and the customer’s customers were also changing, so I thought it made sense to analyse the situation using the well-known SWOT analysis tool we had been taught on the MBA: to identify the internal Strengths and Weakness of the business and compare these against the external Opportunities and Threats in the marketplace.
The trouble was, the model didn’t make sense. Or rather, it wasn’t useful. The shift from old technology (mainframe computers) to new technology (client-server) was a threat to the existing business model. But if we moved fast to adopt the new technologies then it could also become an opportunity to upgrade old systems. The rise of cheaper remote programming centres that competitors were building in Ireland (and later India) was a threat if we did nothing. But if we built our own data centres then it became an opportunity. The strengths we thought we had in delivering old technologies were fast becoming an irrelevant weakness. And as the needs of our customers and their customers changed, so the ability to deliver what they wanted yesterday became a ball and chain holding us back from delivering what they wanted tomorrow.
What I discovered then was that, in a time of change, threats and opportunities don’t really exist. Yes, there are changes in the marketplace. But whether those changes turn out to be beneficial or disadvantageous depends more on how we respond to them than on any intrinsic characteristic of the situation.
‘Opportunities’ and ‘threats’ do not exist except in how we choose to respond.