SWOT for a Growth Strategy
SWOT analysis is a well known strategy tool – probably the first strategy tool most people come into contact with without realizing its to do with strategic analysis. You probably know what SWOT is – strengths, weaknesses, opportunities and threats but in this piece we are going to look at some more advanced thinking and tips to do with the SWOT analysis and how you can use it as part of generating your growth strategy.
- What are the key considerations for each area of the matrix?
- What should leaders do with a SWOT analysis?
- What should you do further with Strengths?
- Which strengths and weaknesses should you prioritise?
Lets start with some typical INTERNAL considerations – strengths and weaknesses
When you're doing a SWOT, it's good practice to invite input from a number of different people and teams, in fact it's always good practice to run a SWOT on your team. Get customer feedback, do a survey, interview them – this is really crucial input. Also - industry knowledge, its important to understand what's going on in your industry. There is a tool there a separate tool called PESTLE that's a good vehicle to get a structured view on what's going on around your organization. Involve Sales and Service when doing a SWOT analysis because your salespeople are out there, they're talking to customers, they know what people are buying and not buying, they know what the competition are up to. So you'd certainly be in a good position, if you've involved your sales team, and also your service team. They're looking after customers; they know how people are feeling the sentiment out in the customer base and the marketplace. So there's two really valuable bits of employee opinion in there but equally speak to the whole organization, because everyone's got a view on what's going on.
Last you can run a number of SWOTs within an organization, the overall organization, you could apply it to any particular product, you could apply to any particular service geography, office or team. So and I think it's sort of good, good practice to sort of run the analysis across a number of areas.
What should you do further with Strengths? Or any of the other quadrants?
So let's say you're a Chief Executive or on the SMT. How do you behave in each of the quadrants?
In terms of STRENGTHS, we think the role of a chief exec or leader of any description is to really recognize the strengths, protect them and grow them. Where is the organization really strong? and Recognize those things protect and grow them
WEAKNESSES? Good CEOs spend a lot of time in the Weakness box. And the reason for that is that in the in this quadrant, you tend to get some quite gnarly historical problems that people have struggled to deal with properly. As a Chief Exec or a senior manager you have authority and with that authority, you can deal with the problems here, perhaps that other managers have struggled to make any real difference to. Particularly, in a new role in any organization it good to focus and eliminate what's been sitting in there and use that authority.
What about OPPORTUNTIES? Firstly, be bold. Be bold with the things that you are choosing to focus on, invest in them properly, and then also stop other areas of activity. You can’t do everything – strategy is about choice. So be really focused about choosing one or a very small number of opportunities to focus on, and then make sure you're funding them properly.
And THREATS? A bit of a glib answer here, but don't put your head in the sand Hope is not a strategy. You can't ignore those threats, a competitor could very likely sit in that box, you're in their sights, you know, they're not going to go away. So the question is, what sort of strategies that you're going to create to deal with that?
So there's some considerations for leaders.
What are you comparing against? Which Strengths or Weaknesses do you focus on?
So a bit more detail, then strengths and weaknesses. How do you know what is a strength or weakness really? The key thing here is that you have to look at things relative to the competition. So you might think your brand is strong, because you like it. But that doesn't mean that the brand is strong ! The question you must ask yourself is - Is it strong relative to the competition? So always compare strengths and weaknesses to the competition, an individual competitor or the marketplace, if you can do that. The other thing to do here is to score them, rank them, prioritize them. A simple approach to use a +5, +4….0…..-4, -5 scoring system to try to bring some measurement and objectivity.
Then in terms of which strengths and with weaknesses, perhaps to focus on, you need to focus on the ones that differ relative to the competition. So what we mean here is to invest in the strengths where you're well ahead - protect and invest in the strengths where you've really got significant distance between you and the competition Equally, eliminate the weaknesses - focus on the weaknesses, where you're most behind. It's common sense, if you've got a complete disaster zone going on in some aspect of the business, then you have to focus on that to eliminate that as it's not the sort of weakness you can ignore.
Therefore, you don't really tend to prioritize strengths and weaknesses, where you're equal to the competition, because there's no real gain to be had, you need to focus on the extremities, really protect the strengths, really deal with the skip fires, in terms of in terms of weaknesses.