If you want to run a successful organization, regular examination of your business practices ensures you are operating efficiently. There are several ways to do this (which we'll explore in a future post), but one of the most effective and popular methods is conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis.
Bonnie Taylor, chief marketing strategist at CSS Innovations, says, “It is impossible to accurately map out a small business’s future without first evaluating it from all angles, which includes an exhaustive look at all internal and external resources and threats. A SWOT accomplishes this in four straightforward steps that even rookie business owners can understand and embrace.”1
What is SWOT?
SWOT is a type of business analysis tool that helps you identify both helpful and harmful elements from inside and outside of your organization. You can use this type of strategic analysis to investigate how your organization compares to competitors or complete market research.
The SWOT chart above is one way to organize the information in a way that it is easy to understand. The left column records elements helpful to your organization, while the right one records harmful elements. In addition, the top row captures elements that are part of your internal structure or culture, while the bottom row captures elements that are external to your organization.
When should I use SWOT?
Any time is a good time to employ a SWOT analysis, but particularly when:
- Your business or industry is dealing with a sudden and unexpected crisis
- Exploring new initiatives
- Revamping internal policies
- Considering opportunities to alter a plan midway through its execution
- Checking your industry to learn how you can improve operations as needed
- Curious where you are performing well and where your business operations need adjustment
The Covid-19 lockdowns caused hardships for some companies, opportunities for others. The business model for organizations had to change almost literally overnight if they were to stay in business. Companies of all sizes around the world strategized to maintain success, or to just stay open. Some found that opening themselves to new ways of thinking about how to server their clients and customers has made them stronger than before. A SWOT analysis during such times of instability gives structure to a re-examination of how business is conducted, and changes needed to keep up with the "new normal."
What do I need?
- A facilitator who will guide your team in filling out each section (It is best to have someone who is not part of the department currently affected by the problem you are trying to address)
- Stakeholders from every area being affected by the problem you are trying to address
- A time/place where you will meet (online or in person)
Instructions:
- Gather all the stakeholders in a place where they can begin sharing ideas.
- Decide what the goal of your SWOT analysis is. Are you conducting market research in preparation for a new product launch? Are you trying to do some business restructuring?
- Have people begin sharing ideas.
- Have the facilitator begin filling in sections as people share ideas. (If there is a disagreement regarding where items fit on the template, write it in the notes and return to it later).
- Keep going, at least until each section has some content in it and everyone has had a chance to speak.2
Of course, you will not see any changes if you don't act on the discoveries found through your SWOT analysis. Rearrange the information to identify strategic changes to pursue and incorporate them into your strategic plan. Use the questions developed by Heinz Weihrich in the TOWS framework3, an extension of the SWOT analysis, to determine next steps:
- How can we use our strengths to take advantage of the biggest opportunities available?
- How can we use our strengths to overcome our biggest threats?
- What actions do we need to take to overcome our weaknesses?
- How can we minimize our weaknesses so that we can better handle our threats?
Now you have what you need to determine where you need to change course. You can use this information to create your business goals, the steps needed to achieve those goals, and when you want to achieve them.
Understanding in relation to your business plan and your competitors is crucial for a successful business. Your plan is a living document that needs to be updated more than every few years. A SWOT analysis helps organizations fully understand all the factors they need to know to make important business decisions. Don't wait for a major financial crisis, natural disaster, or any other sudden problem to examine your plan. Conduct an analysis today so that you can more easily pivot tomorrow.
Related Blogs:
How a Productivity Planner can Help in Goal Setting
Setting Goals: What's Your "Why"?
Coping with Goal-Setting Anxiety
1Schooley, Skye. "SWOT Analysis: What It Is and When to Use It." 2/2/23. Accessed 2/9/23. https://www.businessnewsdaily.com/4245-swot-analysis.html
2Leigh, D. (2009) “Chapter 5: SWOT analysis.” Watkins, R., & Leigh, D. (Eds.). (2010). Handbook of improving performance in the workplace (1 ed. Vol. 2 – Selecting and implementing performance interventions) (pp. 115-137). San Francisco, CA. Pfeiffer. http://boisestate.eblib.com/patron/FullRecord.aspx?p=468975
3"An Introduction to the TOWS matrix: Putting SWOT into action." Accessed 2/9/23. https://www.professionalacademy.com/blogs/an-introduction-to-the-tows-matrix-putting-swot-into-action/
