Performing a SWOT Analysis

Don’t put it off any longer; it’s not that difficult!

First, an introduction…

SWOT analysis a strategic planning method used to evaluate Strengths, Weaknesses, Opportunities and Threats involved in running a business, a particular project, or beginning a new venture. (Wikipedia.com) The technique is credited (in some arenas) to Albert Humphrey (1926 – 2005), an American management consultant. (Wikipedia.com) Although there is some disagreement here and you can find references to others who may have created the SWOT analysis technique.

Let’s define each element of the SWOT analysis (Wikipedia.com):

S – Strengths: Positive characteristics of the business or project that give it an advantage over others in the industry. Strengths are what separates you from the competition.  For example, a strong focus on customer service that has been praised by clients.

W – Weaknesses: Characteristics that place the business or project at a disadvantage relative to others in the industry; your weak spots. This requires participants to look internally at where the weak spots are that can be harmful to growth of a business or the success of a project. For example, outdated product offerings.

O – Opportunities: External chances to make increased sales or profits in the business or for the project to be a success. This is where creativity comes into play as you want participants to think outside the box and be creative in their ideas.  For example, a new market opportunity based on a new use for your product.

T – Threats: External elements in the environment that could have a negative impact on the business or threaten the project’s success.  This requires that participants have an understanding of the external environment – competition, the industry as a whole, etc. For example, increased government regulations that will affect how you do business.

Preparing for a SWOT Analysis…

Take these steps to prepare for a SWOT analysis session:

1. Determine the purpose of the SWOT session. Is it to determine the feasibility of moving forward with a strategic project, to determine new products and services for the business, to determine the benefit of opening a new branch of a business, etc.
2. Determine who should participate. Don’t invite just those individuals in management; invite a cross-selection of participants from a variety of business units to participate.  You want to get a variety of perspectives on strengths, weaknesses, opportunities and threats.
3. Select a facilitator to lead the session. Facilitating SWOT sessions is not necessarily an easy task, and if you are the owner of the business, the sponsor of the potential project, or a senior member of the leadership team, you may be “too close” to the situation to be effective as a facilitator. Consider hiring an external facilitator to lead the session.
4. Select a note taker. Select someone who is not participating in the SWOT session to take notes and capture all information presented and gathered during the session.
5. Spend at least 2 – 3 hours in the session. Select a place where the group will be undisturbed and can focus on the analysis.
6. Do a brainstorming session for capturing strengths, weaknesses, opportunities and threats. Go through each element in order. Have the facilitator capture the data but do not react to the data presented – no debates, no arguments.  All data gathered during brainstorming should be captured. Be aware that you may have a strength that is also a weakness.
7. Once all the data is captured, group the data. Look for commonalities and themes that arise.
8. Prioritize the data you have grouped.
9. Make your plan! How will you work on the areas you selected to focus upon?  What aligns to your strategy? What will help move the project forward? Assign teams to focus on particular strategic areas based on the SWOT analysis.

Remember: Plan ahead of time for the SWOT analysis session.  Have in mind what you are trying to accomplish – your objectives. Are you trying to better compete against your competitors? Are you considering development of new products and services? Are you trying to determine where to focus your energies in the upcoming year? Plan ahead of time for the session so that participants can set aside the time on their calendar. Prepare participants beforehand with information as to the objectives. Keep it a safe and comfortable environment. You want everyone’s ideas, opinions and thoughts. No input is incorrect!

Stay tuned for an example of a team performing a SWOT analysis in an upcoming post.