Last week, I talked about some of the challenges with SWOT assessments, and at its heart, the issue comes down to (a) being as specific as possible, and (b) finding useful insights about your company.
Let me give you some Before and After examples from recent SWOTs that I’ve done with clients to illustrate what a good SWOT looks like.
Before: “Our people” (strength)
After: “Our skills at designing administrative processes” (strength) and “Our lack of sales skills” (weakness)
How the insight and specificity helped: These insights led the company to (a) use their administrative excellence as a differentiator in their marketing, and (b) identify the need for sales training. Those actions, in turn, increased their gross margins by improving their marketing and sales.
Before: “Our brand” (weakness)
After: “Our deep understanding of our customers” (strength), “Our passion for solving engineering problems” (strength), “How we communicate the value we create for customers” (weakness), “Our marketing budget relative to our competitors” (weakness)
How the insight and specificity helped: These insights led the company to (a) invest in a brand strategy, (b) increase their marketing budget, and (c) get the help they needed from the outside. Those actions, in turn, increased their gross margin, increased their revenue, and lowered their customer acquisition costs, because they were clearer about their offerings and messaging with prospects.
So, when you’re doing your SWOT, the question to ask yourself is, “Does it give us insight into where we should commit significant resources over the next 3 years to improve our chances of success?”
The question to ask yourself about your SWOT is, “Does it give us insight into where we should commit significant resources over the next 3 years to improve our chances of success?” If it doesn’t, then here are some ideas for upgrading it.
- Talk more. Insights and specifics come from digging and sharing ideas, and that comes from talking.
- Have each department do a SWOT. Because departments often focus on internal issues, make sure that every department has 5-10 bullets that are focused on the external environment. Also have the CEO do a SWOT separate from the others; this provides the broader and longer view. Once you have all those SWOTs, roll them up into a single SWOT by having people vote on the top bullets from across all of them.
- If you have a SWOT from a previous year, force your team to come up with at least 5 new bullets that have changed from the previous one.
- Have people do SWOTs for other departments – have sales do the operations one, and have finance do the sales one.
- Have your outside advisors give their input.
- Get a strategy consultant to help – the more SWOTs you do, the better at it you become…so get the help of someone with more experience than you.
Any strategy process gets its value by digging deeper than usual, because that’s where new and unexpected insights come from. A SWOT shouldn’t just capture what you think about the business; a good SWOT should change how you think about it.