A SWOT analysis is a great tool to help you determine what’s important to your company’s success. This is a do-it-yourself way to identify priorities and add power to your strategic planning process.
The SWOT (which stands for strengths, weaknesses, opportunities and threats) analysis is best done with a small team of people who know the company best — probably your executive team and a few trusted advisors. Gather your key players and ask them to participate in a bold and forthright discussion of your company’s most important issues.
Focus on Identifying Issues
There’s no doubt that as you talk, people will offer ideas to change, improve or address the issues at hand. That’s fine, but identifying the issues is really the point of the exercise. If solutions pop up, jot them down, but stay focused on the task at hand.
What is your organization really good at? What makes you better than the competition? Some companies might excel in research and development, for example, while others make their mark in terms of quality, culture or product offering.
Consider all areas of your business to discover the best things about your company — both from an insider’s perspective and from your customers’ perspective. Be sure you’re identifying the true differentiators, not the “me too” offerings that are standard in your industry.
While it may be difficult to discuss your company’s shortcomings, every business has room for improvement. Why are you not number one in your industry or market? What currently holds your company back from being the best it could be?
Perhaps you don’t have “the right people in the right seats on the bus,” as business author Jim Collins would advise. Maybe you’re lagging behind in technology or your pricing isn’t competitive. An honest look at your company will reveal its deficiencies.
What’s happening in the marketplace or industry that’s a natural fit for your organization? How can you improve your products and services to take advantage of new technologies, government regulations and population or cultural changes? Keep in mind that your strengths and weaknesses may point toward opportunities.
What’s happening in the marketplace that will present a challenge to your organization? What do you worry about that you have little control over?
For example, do you rely on supplies from countries in economic or political turmoil? If you are in a highly regulated industry, is there new legislation that could force you to change the way your company works? Is modern technology making your product obsolete?
Note that while strengths and weaknesses are internal to your company, opportunities and threats tend to come from external agents and influences.
Maximize … and Minimize
Once your group has completed the SWOT analysis, the next phase is to brainstorm ideas to maximize your strengths and opportunities and minimize your weaknesses and threats.
Go through each of the SWOT lists and determine priorities. Be sure to focus on what is significant and actionable. For example, if your manufacturing costs are identified as a weakness, what can you do to reduce waste and streamline processes? Maybe one step would be to investigate several new suppliers to create some pricing competition. If so, assign someone to interview vendors and present some options.
Each participant should leave with a short to-do list and a schedule. Set up a time to meet again and report back. Breaking big solutions into small tasks makes them easier to accomplish and keeps things moving along the right path.
Of course, you must update your SWOT analysis regularly to keep aligned with changing market forces and the competitive landscape. Make a SWOT analysis a once-a-year exercise to kick-start your strategic planning.
Please let us know if we can help you initiate or act upon your SWOT analysis.