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.

I like SWOT assessments (you know – strengths, weaknesses, opportunities, and threats) for getting people’s thinking out of the day-to-day and into a creative, strategic “space.”  Unfortunately, I often see SWOT assessments that are just marginally useful.

Here are some tips on how to get more value out of your SWOTs.

If you can take a bullet and put it on someone else’s SWOT without changing it, then you’re not specific enough.  One of the favorites to put under Strengths is “Our People”… which is also a good example of a bullet that is not specific enough to be useful in the planning process.  What is it about your people?  Their experience?  Their deep knowledge?  Their ability to be generalists?  Once I know what’s special about your people, then I can create some possibilities about how to leverage that into a better advantage.

Work hard to look at the future.  We live our lives in the day-to-day, so it’s hard to look ahead several years.  And that’s why it’s an advantage to do – because most people don’t.

Put “the hard stuff” on the list.  Every business has issues that it doesn’t like to talk about.  The problem customer.  The problem owner.  The problem staffer.  Without knowing the details, I can tell you that those issues consume a large amount of resources.  So they need to be on your SWOT – though it will probably take some diplomatic phrasing.  (For example:  “Some customers are easier to work with than others,” “Owners are not always aligned on decisions,” and “Spotty follow-through.”)

Make sure you have bullets that cover the whole breadth of the areas you’re involved in.  Often, leadership teams focus more on certain areas, and that bias comes through on the SWOT.  But the non-focus areas are often the places where there is the most opportunity, especially for companies that are developing from the lean-and-mean start-up to a more complete and sustainable enterprise.

So, here’s the question to ask about your SWOT to see if you’re getting the value out of it:  “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 gives you that, then you’re getting the value you should.  If it doesn’t, then you should take steps to upgrade it – which I’ll cover in my post next week.