In a previous post, I mentioned using SWOT analysis for analyzing the forces impacting your innovation. SWOT (Strengths, Weaknesses, Opportunities, Threats) is a flexible and simple tool that can be used in many different contexts: strategic planning, organizational evaluation, career evaluation, technology competence analysis, product or service analysis, strategic partnership evaluation, and so on. There are numerous sites that cover the basics of SWOT analysis. As such, instead of going into the HOWTO of SWOT, this post will focus on best practices for SWOT.

In basic terms, SWOT is a great tool for structured brainstorming, with an intent to map out the landscape of the strategic question being evaluated, and determining the potential next steps that the organization should take action on. A successfully conducted SWOT will give insights on existing strengths to maintain, build and leverage on, weaknesses to minimize or remedy, potential threats to counter or minimize, and opportunities to prioritize and exploit.

Given the simplicity and the flexibility of SWOT process, it is quite easy to fall into traps that would result in inaccurate, incomplete and subjective analysis. However, by keeping a few best practices in mind, you can ensure that you have a comprehensive, methodical and objective study. Here are some of the practices that worked for me in the past; please add on to this list.

Emphasize Detail

The simplicity of the process can easily result in 2-3 word phrases that don’t mean anything:our technology platform is superior. Remember, the goal is to come away with insightful and actionable areas. One method to achieve that would be to ask the Why? question at least 5 times.

1. our technology platform is superior — why?
2. it is superior because we have a flexible platform architecture — why?
3. it is a flexible architecture because we had to implement some specific functionality for a few customers — why?
4. we needed to enable our customers to optimize their operations — why?
5. they needed to streamline the workflow and customize the starting point for improved job flow and they didn’t find any company or product to do what they needed, so we quickly did the work for them

With these 5 quick questions, you just identified your strength in building customized solutions, and opportunities to market the strength of your product architecture, to investigate new product extensions to support this existing need, and the potential of offering customized solutions.

Another method for getting to details is to do a further breakdown of the given statement and analyze each attribute separately. As an example, our product quality is poor could be further broken down to:

• Product quality — does the product meet the agreed upon specifications;
• Product specification — does the product specification reflect the customer needs, benefits and problems;
• Product usability — is the product easy to learn and use;
• Product performance — does the product performance meets the customer needs;
• Quality assurance (QA) process — is the QA process effective;
• …

The bottom line is that there are many things that could contribute to overall product quality, and some more important than others. Again, by focusing on the details, you have more accurate information for your decision making process.

Apply/Do Objectivity

Unfortunately, SWOT’s simplicity can also result in a biased analysis. However, even in the areas of high subjectivity, you can apply objective analysis by bringing in varying opinions. If you haven’t already done so, visit the Periodic Table of Visualization Methods, and check out potential tools that you can use for aiding on your objective data analysis, such as performance charting or radar charts. But, remember, quantitative is not automatically synonymous with being objective. As human beings we tend to be optimistic, even when we think otherwise.

Align With Organizational Strategy

The SWOT process does not have favorites; it just states the findings and observations. However, you can link the analysis results with your strategy, previous market and competitive analysis reports. This creates a personalized SWOT analysis that would better aid in your decision making process. After all, not every opportunity and threat is equal, and your strategy will highlight the necessary tradeoffs: what are we not doing. During your objective analysis, you can weight and rank each of the areas. This can be as simple as using a scale of 1-5, or percentage based evaluation.

Your strategy also will highlight the evaluation of important intangible resources: capabilities, competencies and reputation. Although these may not come up during your SWOT analysis, these intangible resources play into a firm’s competitive differentiation. Through this analysis, you can identify opportunities (ex. new application of existing technologies) as well as threats (ex. revamping of the workforce with new technologies).

Recognize The Moving Target

SWOT analysis captures the landscape at a given point in time. Today, everything moves at the speed of light. However, with some additional work, investigation and competitive intelligence gathering, you can distinguish between where your organization is today and where it can be in the future. This is where the gap analysis can help to identify potential strategic and tactical actions your firm can take.

Technorati Tags: SWOT, best practices, decision making process

Related Posts:

Trackback URI | Comments RSS