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Don’t Start Strategy With S.W.O.T.

Time to Retire This Old-School Tool?

Source: BigStock

Over the past few years of helping organizations develop new strategies, I’ve become aware and rather alarmed at a prevalent pattern, one which I find counterproductive, even detrimental, especially in these times of VUCA (volatility, uncertainty, complexity, ambiguity). It concerns the starting point for strategy work: nearly every time I begin working with a new client, I discover that their existing method for crafting new strategies starts with convergent thinking. Convergent thinking is the polar opposite of divergent thinking, which I believe is the kind of thinking true strategy-making — i.e. using the playing-to-win choice-making framework — demands, at least when you’re contemplating a new strategic direction.

To show just how embedded this pattern is in, take a moment to mentally fill in the blanks with a top-of-mind answer:

Strategic ________________

S.W.O.T. _________________

Invariably, the answers I get when I do this short exercise in strategy sessions are “planning” and “analysis,” respectively.

Here’s the rub: planning and analysis are convergent modes of thinking. But if defining a new strategy is about considering many possibilities and making critical choices, then this kind of thinking doesn’t work. Perhaps that’s why so many people struggle with strategy.

In fact, it’s probably the very reason the starting point for most is the S.W.O.T. (Strengths, Weakness, Opportunity, Threat) Analysis. S.W.O.T. is probably the most dominant way to begin strategy efforts. Sounds cool, right? “We’ve done a S.W.O.T.” Woo hoo! It’s a great acronym…sounds like SWAT (special weapons and tactics). So it’s a brilliant marketing gimmick. No one actually knows who came up with S.W.O.T., which is a bit curious…maybe whoever did wanted to remain anonymous for a reason.

Be that as it may, let’s think about S.W.O.T. for a moment. Generally what happens is that some poor young MBA gets sent out to do a S.W.O.T. analysis, which will then be turned into a “strategic plan,” complete with who, what, when, how, and how much ($).

But let’s back up and parse the S.W.O.T., starting with the “S,” for strength. What is a strength? When we say “strength,” we are loading the concept with a silent context. Context is what gives the word meaning in the first place. There is no such thing as a universal strength in business life. I cannot think of a single strength that is a strength in all contexts. A strength in one context can be a weakness in another context.

In fact, this is the very point Malcolm Gladwell made in his 2013 book, David and Goliath. This one line was my main takeaway from the book: “The powerful and the strong are not always what they seem.” Gladwell was talking about the power of context, which ironically he introduced us to in his first and best book, The Tipping Point. David beat Goliath because he changed the context within which the battle was fought, and what appeared as a weakness in one context turned out to be a strength in another.

A strength is only a strength in the context of the two key strategic choices at the heart of strategy: a specific where to play and how to win in that space. For that matter, a weakness is only a weakness in the context of a where-to-play/how-to-win choice. The same holds for opportunities and threats.

My point: if you start your strategy efforts with a S.W.O.T., without having an explicit, and explicitly different, set of strategic choices, the poor schmo who’s actually doing that S.W.O.T. has to decide what to pay attention to and what to ignore. The reason being, it’s impossible to do a S.W.O.T. analysis of everything. That’s a century-long assignment of a million or so pages in length, and our young MBA only has six weeks and a few pages to do his S.W.O.T.

And what do you think the easiest thing for the to do? Yep: Assume the implied choices in the existing strategic plan. “Given our current plan, our S.W.O.T. looks like this.”

This explains why most “new” strategies end up looking a lot like the “old” strategy, with some updated facts and figures.

I used to be agnostic on S.W.O.T. No longer. I’m violently against it as the starting point for strategy. And I realize now why I hated strategy the way business school taught it, but now love it the way I learned it from Roger Martin.

I now think it’s far better to think through various strategic choices, ask what would have to be true for those choices to be good ones, and explore those hypotheses through valid experiments, before ever locking and loading on a strategy. It’s creative and divergent thinking, which is the polar opposite of the convergent thinking that fuels planning and analysis.

The difference between divergent and convergent thinking is the difference between chess and checkers. Both games are played on the same board, both games have the same number of players. With checkers, though, you really don’t have much to think about, the players are all the same, and the moves are essentially single, linear steps, or simple multiples of the same step. Chess has far more kinds of players, far more possibilities and options to consider, including the competitive response to a single move. That’s why when you watch the chess masters play (not sure why you’d want to do that), the “action” is mostly invisible…they’re thinking about their choices and the possible reactions to those choices.

If you want and need a new strategy, don’t start with S.W.O.T. I’ll show you a better way in my next few articles.

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