Have you ever built a strategic plan for your company? It’s a daunting process that can take hours and leave you even more overwhelmed than before you started. The SWOT Analysis tool is a simple and easy to use tool that can help you build a strategic plan in a quicker and more organized fashion.
What is a SWOT analysis?
It was a tool invented in the 1960’s by Albert Humphrey who was a Management Consultant at the Standard Research Institute. The goal of the SWOT Analysis was to provide a model that could bring accountability and objectivity to the planning process. Over the years I’ve found that when most companies use this tool, it’s used incorrectly or they do nothing with the information that is gathered. They get paralysis by analysis. I think there is a better way to quickly use the tool in order to get you on the path of building a strategic plan for your company.
By definition, a SWOT analysis is a structured approach to evaluating your company’s competitive position and a technique used for strategic planning.
Where do I start?
The structured approach comes from what SWOT stands for and also how the sheet is laid out. All of the information is listed on one sheet which is where the snapshot comes from…because you see everything in one view.
Let’s break this down further and explain the four categories
S = Strengths: Internal factors you have control over that positively impact your business.
W = Weaknesses: Internal things that take away from your strengths that you can improve upon.
O = Opportunities: External factors that can contribute to your success by leveraging your strengths.
T = Threats: External factors that you have no control of that can negatively impact your business.
Using the sheet, you and your team are going to list 5 to 10 items under each category. This can be done individually or as a group in a conference room and shouldn’t take that long (as long as the objective has been clearly identified). After you’ve gotten your original list, the final list should be paired down to five items under each category.
You may have to consolidate items. For example, if your website needs updating and you need social media accounts set up, rather than listing two separate items, you can categorize them as marketing.
Where most companies use the tool incorrectly is that they don’t identify the items properly as internal and external in the different categories. Sometimes weaknesses also get listed under opportunities. While a weakness is an opportunity, it’s important that these get identified properly in order for you to use the tool properly.
What do I do after the sheet is filled in?
Once the sheet is completed and you’ve narrowed the list down to five items per category, you now have a snapshot of your business. You can see what weaknesses you have and how to apply your strengths to make improvements. You can view the opportunities and threats that your company is facing and how your strengths can help you go after the opportunities and protect you against the threats. Improving your weaknesses may also help protect against threats or target opportunities. Now that it’s all laid out visually in front of you, it’s easy to see.
After you’ve done your analysis as a group, you want to come up with five action items which are the start of your strategic plan.
What are the weaknesses that you’d like to fix?
What opportunities do you want to go after?
At first glance after completing the SWOT Sheet, you’ll get a snapshot of the current state of your business. By identifying your competitive advantage, it will help you to structure a strategic plan. Now that you have your five action items, it’s time to figure out what’s needed to start achieving these goals and assign responsibilities to your team.
How to conduct a SWOT Session
The SWOT analysis can be conducted solo or with your entire team. I encourage the latter. When you involve your team, it’s easier to get buy-in on achieving the goal and making a change. You also get more objective input into the tool which means you will get better results. It’s also important to make sure everyone is honest and open with the information they are supplying. The information you get out is only as good as what gets put in (garbage in = garbage out). It’s important that you clarify the objective with your team.
Are you using the SWOT Analysis to fix a problem, look at a new product or just to get a snapshot of the current state of your business? Setting the goal up front and clarifying the objective is critical in order to use the exercise properly.
What’s a Reverse SWOT?
Once you’ve come up with your five action items, you can actually use the tool in reverse in order to dive deeper into the action item and get more details for your strategic plan. For example, let’s say that your action item is to Add Social Media to your company. That becomes what you put into the SWOT tool instead of your company.
What are the strengths you get if you add Social Media?
What are the weaknesses if you add it, etc, etc.
This reverse SWOT will give you more details that are required for your strategic plan around adding social media in order for you to be successful.