3 Critical Steps to Get the Most Out of Your SWOT Analysis

Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different. ~Michael Porter

A SWOT (strengths, weaknesses, opportunities, threats) analysis is only the beginning of identifying a strategy. I see too many organizations conduct a SWOT and stop there; not knowing how to turn that analysis into a strategy. This is what I believe should be the outcome of a SWOT.

First, here’s my working definition of creating strategy. Creating strategy = identifying a few strengths and/or unique attributes that can be intentionally leveraged to your advantage toward solving an external problem or felt need, while recognizing and mitigating risk.

Second, my definitions of SWOT.

(a) STRENGTHS: includes not only what you do really well, but also what is unique about your organization and/or what you do. (b) WEAKNESSES: what you do not do well. (I’d stay away from using language like “what’s not working” because that implies it needs to be fixed. Not all weaknesses need to be fixed.)  (c) OPPORTUNITIES: this list should include all things external to your organization that could provide direction for what you choose to do and how you do it—technological changes, changing competitive landscape, regulations, innovations, cultural shifts, demographic swings, etc. (d) THREATS: this list is similar to opportunities but focuses on anything external that could have a significant negative impact on what you choose to do.

If you’ve kept each one of those four lists in its appropriate lane, you can now identify a strategy.

Step 1: Look at your lists of STRENGTHS and OPPORTUNITIES side by side. Using my definition of strategy, what specific strengths and/or unique attributes can you intentionally leverage to your advantage toward anything you’ve put on the opportunities list? This could mean that your strategy doesn’t focus on what you consider your #1 strength. If there’s not a viable opportunity (external problem or felt need) for you to intentionally leverage that strength, then that doesn’t align with the definition of strategy. You might discover that the strength you would have put third or fourth on your list if you were to rank order them, could be intentionally leveraged toward solving one of the opportunities you identified.

The best strategy comes from first pairing your strengths with the opportunities where you can have the greatest likelihood for success.

Step 2: Next, look at your list of THREATS. Are there any threats that would create too great of a risk to pursue what you identified in Step 1? Any threats that would essentially veto that strategy? Are there initiatives you could implement to help mitigate some of that risk?

Step 3: Lastly, look at your list of WEAKNESSES. What weaknesses, if any, do you need to address in order to ensure that you can accomplish the strategy you’ve identified? Notice that spending time fixing weaknesses is the last thing you would do to create a strategy, and is the last priority in determining what strategy to pursue. That’s why it may not be a prudent use of resources to fix weaknesses that have little or no impact on your strategy.

It’s your turn. What’s your strategy?

 

 

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