SWOT Analysis – Why it’s important, and What you do with it

shutterstock_79278154Have you ever had anyone ask you for directions to a specific place but had no idea where they were?  You happen to know precisely where the specific location is, and you could give directions to help the person from many different starting points, but the problem is they don’t know where they are.  How would you figure out how to get them to their destination?  You would likely ask them for details of their surroundings.  What do they see?  Where did they come from?  How long have they been traveling for?  All of these details would help you to figure out where they are and would enable you to give the appropriate directions to get them to their destination.

In strategic planning the purpose is to figure out where the company is going and how we are going to get there.  We establish goals that follow the SMART template, and we break the goals down with timelines.  These are all important components to the strategic plan, but what many forget to do is establish the starting point.  Where are we all standing right at this moment?  If we were in a strategic planning session with 10 participants, and we established the goal or destination and put a stick pin in the map – we all know where we are going.  Then if we asked 10 participants to individually put a stick pin in where we are right now – chances are we would have 10 pins in different locations.  This is a challenge to strategic planning, and the SWOT analysis helps us to establish where we are standing – the now position.  It is an analysis that moves and shifts as we progress and should never be considered a static analysis.

SWOT stands for Strengths Weaknesses Opportunities Threats.  The purpose is to help nail down where are we now.  What are we doing well?  What do we need to work at?  What else could we do?  What do we have to watch out for?  Some people narrow down the opportunities and threats as exterior factors, but I like to leave it open.  If there is an internal factor that we don’t do well (weakness), but it could potentially destroy the business (threat) it needs to be emphasized in both areas.  Every business, even a solopreneur, needs to complete a SWOT analysis to get clarity on where the business is really at.  The purpose is to get short statements from everyone individually – and then summarize them into preferably 5 and no more than 10 in each category.  Too many is in an indication that there is a lack of consensus on where we are standing.

The SWOT analysis is a great little summary that should be used and referred to throughout the strategic planning process and not just a little exercise for the purpose of ‘completing a SWOT’ (if that makes any sense).  You do not need a consultant to come in to get this done, but you may want to get someone from outside to facilitate the exercise since it helps to keep everyone engaged.

So the next time you get invited into a strategic planning session, I hope that you are able to take this information and apply it into the process and know why you are doing this (again), and how it will be used.  If you have a small business and you don’t know where to start in completing your own internal strategic plan – starting with a SWOT analysis is a great place to begin.  If you work in an organization that is known for strategic planning sessions that are fluffy and never seem to end up changing anything – this is your chance to ask the question – Before we figure out where we are going, do we all know (and agree with) where we are standing right now?   Strategic planning is fun, it’s like planning a trip, and the next time you do a strategic planning session I hope that you engage the same old boring SWOT analysis with a bit more meaning,…and enjoy it.


 
 
 

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