Let’s keep it real: While myriad technology-driven changes have garnered much of our strategy-related attention and interest over the last several years, the need to evaluate an organization’s fundamental strengths, weaknesses, opportunities, and threats is more important than ever.
As a company leader, you can attempt to corral anxiety by investing in every digital marketing bell and whistle your smartphone or tablet can download, or you might hire an agency to rebrand your website and logo. But without regular and proper evaluation of your business from every angle, you’ll never be fully aware of—much less confident about—your competitive edge. You certainly won’t have the wherewithal to empower your staff to take action on the critical areas that need improvement.
In the first SWOT blog of this three-part series, we discussed a major misconception in the executive business world: most business leaders really think they’re executing the SWOT analyses correctly. Even worse, many believe they don’t have to complete SWOTs anymore, and as a result have diluted their business strategy into nothing more than a SWAG, which here in the great state of South Carolina stands for a “Scientific Wild-Assed Guess.”
It’s critical that you evaluate your business down to the brass tacks in order to move forward in a sustainable manner. In my last post, we discussed the first 3 of 10 reasons why your SWOT might really be nothing more than a SWAG, and what to do about it.
Following are the next 4 of the 10 biggest reasons why your SWOT analysis could be a real whiff– and what you and your team should do about it:
Reason #4: I Can’t Tell My Left from My Right!
We’re not talking about tying shoes or playing baseball here: Many SWOTs gone awry do so in the most fundamental areas, like your staff misunderstanding which parts of the analysis are related to the internal parts of the business, and which portions are external in nature— those dealing with your market and competitors. This is why it’s profoundly important to go back to the basics and make sure each participant in the analysis understands exactly what SWOT stands for. Here’s a handy reference guide:
Strengths and Weaknesses Are Internally Focused
- Strengths: These are elements of your business that contribute to company success in the marketplace. They can be operational in nature, cultural, product oriented (technology, for example), and so on. What does your organization do well? Strengths are always internal to the org
- Weaknesses: The other side of the internal coin. What are your company’s shortcomings? What don’t you do so well? Which internal factors, resources, and skills are holding you back? Like Strengths, Weaknesses are never external.
Opportunities and Threats Are Externally Focused
- Opportunities: These are the market, economic, regulatory, or competitive factors on which your company could potentially capitalize. Opportunities are within your world, but aren’t internal to your business.
- Threats: Threats are similar to Opportunities, with one big exception—you could lose an awful lot as a result of them! What’s happening in the market, with the competition, and so on that could cause problems and threaten your business? Threats are also never internal.
Reason #5: You’re Not as Strong as You Think
When I was a kid, the State Fair always had the “strongman game.” My friends and I couldn’t resist it. Facing a big, towering plank with a large round bell fixed atop, we’d swing the mallet with all of our might in hopes of producing enough force to shoot the projectile up a channel in the plank – ringing the bell and announcing our superior manhood to all within earshot.
The funny thing is, nobody ever rang that bell. We just weren’t a strong as we thought we were. False bravado at the fair is funny – but it’s a big hurdle for the SWOT. Unless you’re Budweiser, Chick-Fil-A, The Cleveland Clinic, or some other widely known brand, trying to convince yourself that your company is awesome simply by writing it on a white board is nothing more than kidding yourself. No matter how many swings of the hammer you take, not being strong is simply not being strong.
It’s best to be brutally honest about your weaknesses, and refrain from kidding yourself about your strengths. If your company strength column outweighs the weaknesses, you’re probably misleading yourself and your team.
Reason #6: The Emperor Has No Clothes
In some companies, nobody wants to say what needs to be said in front of the big guy, so they say nothing at all. When this sloshes into the SWOT brewing process, the beer goes flat in no time. The CEO or the head of sales or the COO commands the opinions of the day, and everyone nods their head in agreement.
“You’re so right, RJ. I totally agree with you, RJ. Well said, RJ. Would you like another cup of coffee, RJ?”
Nobody likes a yes man – especially the SWOT process. Change that by challenging the things that don’t make sense, no matter where they come from. Ask for validation and data. Don’t be a wimp. Leave no stone unturned!
Reason #7: The Democratic Process Blunder – Let’s Vote!
Some leaders feel inclined to have everyone leave the SWOT with a feeling of “Boy, we did it,” no matter how things went. That’s a good outcome, but it’s not your objective. Voting on the top three to five items from a long list of strengths, weaknesses, opportunities, and threats won’t help. Frankly, voting on the top ones while ignoring the rest will undercut the hard work of your team.
“But that’s a really long list of stuff! We can’t possibly tackle it all. We need to trim it down.”
If your team built an extensive list, they did so for good reason. Don’t shortcut all of that brainpower with a vote for the best of the best. They’re all good—and in the case of weaknesses and threats, they’re all bad, and they should be. If the group thought they were important enough to list, you better think they’re important enough to do something about!
So…we’ve run through seven of 10 reasons why your SWOT analysis may not be up to par. Do I have your attention? Are you wondering if you’re really SWAGGING when you thought you were SWOTTING? For more insight into changing your company’s view of SWOT – and uncovering the right insights regarding your business, stay tuned for Part III which wraps up with the final three reasons why your SWOT may really be a SWAG.