Extracting the value from your SWOT exercise
I recently read an article which really resonated with what I had been exercising in my past works. I have always found SWOT to be a powerful tool for me to understand the core advantages and gaps within an organization, thus aiding me to identify a suitable path for defining the organization’s strategic plan. To me, SWOT was a summary of the ‘external’ & ‘internal’ analyses for the leadership’s consumption in order to make suitable decisions. It is intended to be a tool and not an end in itself, which I have (sadly) seen many business leaders use it as — a SWOT sheet is filled and compliance achieved!
The article “Are You Doing the SWOT Analysis Backwards?” by Laurence Minsky and David Aron, recently published in HBR, sheds light on some similar mistakes made by practitioners of the SWOT tool and suggests approaches to extract real value from the tool instead.
Here are my key takeaways from the article.
Go backwards and be objective
Normally, when we start filling out the SWOT template, the first thing we ponder upon is ‘Strengths’, then ‘Weaknesses’, ‘Opportunities’ and finally ‘Threats’. When we follow this path we are unconsciously falling into what I call ‘a funnel view’, wherein unknowingly we start seeing all aspects rather myopically. Evaluating strengths and weaknesses are internal assessments while evaluating opportunities and threats are external assessments. However, when we approach the analysis in this sequential flow, we start deducing the external analysis based on the outcomes of the internal assessment, thereby, painting a slightly biased picture of how our strengths could translate into opportunities and weaknesses into threats. The article beautifully suggests starting with external analysis in order to form an unbiased view of the organization, and then independently conducting the internal analysis. But wait! Don’t attempt to marry them yet! Just list the findings of the two analyses in the four boxes.
P.S. The PESTEL analysis could also serve as a good tool to conduct an external analysis in order to ensure that you scan the entire spectrum.
Generate Recommendations
Now comes the most often missed step — using the SWOT matrix thus generated to develop recommendations. Here the authors have come out with a very simple methodology — a simple plug and play structure.
Given the condition of [external factor], our ability to [internal factor] leads to our recommendation that we [recommendation].
Example — Given the condition of COVID-19 induced lockdowns and consequential spurt of online purchases, our ability to service customers through our online channel leads to our recommendation that we reorganize our sales teams to provide more support towards online sales.
Easy, isn’t it!
That’s all folks!
I would recommend reading the full article (link below) to see more examples in order to gain an even better understanding of the recommendation-oriented backward approach to SWOT.
https://hbr.org/2021/02/are-you-doing-the-swot-analysis-backwards
