The SWOT Analysis
The SWOT analysis is one of the easiest and best known decision making tools used by leaders and managers. Here is an explanation what a SWOT analysis is, how to write a good SWOT analysis and some examples.
What is a SWOT Analysis?
SWOT is an acronym that stands for ‘Strengths, Weaknesses, Opportunities and Threats’.
This idea was developed from work done in a Stanford University study in the 1960s. The study looked at various Fortune 500 companies and found that there was a difference between the strategic priorities that were set and what was actually done. It also revealed that the problem was not poor employees, but rather a lack of clear objectives. Therefore, SWOT was developed to give staff a clear understanding of a business or project.
The SWOT analysis is one of the most popular available tools for decision making. One of the things that make it so successful is that it is very simple to apply and can be used by either organisations or individuals as a way to define the crucial internal and external influences on their situation. It gives us a snapshot of ‘where‘ we are and is excellent for situational analysis.
The most common way to present and consider the SWOT approach is as a matrix. Here is an example template:
How do you do a SWOT analysis?
Do you want to know how to do a SWOT analysis? Don’t worry; it’s easy!
SWOT stands for ‘Strengths, Weaknesses, Opportunities and Threats’. Strengths and weaknesses relate to internal factors, whereas opportunities and threats are external issues or circumstances.
When using the tool it is worth taking some time to brainstorm as many different considerations as you can under each heading. Then prioritise them; work out which are the top three to five things in each quadrant.
If you need some prompts, here are some questions to help you:
- What are your/your team/organisation’s key skills, areas of experience or expertise?
- Can you define your USP (unique selling point/proposition)?
- What are you passionate about? What do you love, enjoy or prioritise?
- What do you not enjoy doing?
- Where have you failed or fallen behind the competition?
- What skill gaps do you have?
- What circumstances are most troubling you?
- Who is your major competition?
- What is the worst thing that could happen to you/your organisation?
- How can you leverage your present situation?
- Who/what could most help you right now?
- How is change providing new openings?
Remember that weaknesses are often a reflection of strengths. For example, if you have a strength in that you are very good with coming up with lots of ideas, a weakness might be that you find it hard to focus on just one of them. Similarly look at the flip side of external factors; you may find that threats can also provide opportunities.
Using the SWOT for Situational Analysis
Once you have created a list of items in each box spend some time considering what actions you need to take. Here are some questions to consider:
- How can you play to your strengths?
- What personal development, people and processes (what I call the 3 Ps) can help address your weaknesses?
- How can you exploit the opportunities?
- What control measures do you need to put in place to limit the threats?
Most importantly, whether you are using it as an individual or as part of a team, keep is simple and high-level; that is the systems greatest strength.
SWOT Analysis Example
Here is a short example:
First looking at strengths I recognise that I am quite task focussed. This means I am a good planner and show determination when seeing a project through. Moving across to the right quadrant I have noted a related weakness. Because I am task focussed that means I am quite future orientated. The downside of this is that sometimes I can forget to be content in the moment, or to celebrate the success of achieving something before moving on to the next goal.
Then looking at threats I have noted down that there is increased competition in my industry, with more people entering the market all the time. This threat does lead to an opportunity in the bottom left quadrant. I have the chance to refine my USP and stand out from the crowd. Doing this SWOT analysis is a start to this process.
It is more likely that I would list more items under each heading before continuing, but for the sake of simplicity let’s do a little analysis on what we already have.
How do I maximise my strengths and minimise the impact of my weaknesses? There are a few options I could consider under the ‘3 Ps’:
- Personal development: some training to improve my mindfulness and being ‘present’
- Person: find or employ someone else with a complimentary skill set whose strengths/weaknesses are the opposite of my own.
- Process: Put time in the diary to be more reflective on a daily basis and plan ahead to celebrate after achieving a goal
When considering the threats I cannot control new people entering the market but I can work to best serve and therefore retain my existing clients. The opportunity of refining my USP becomes a strategic task, something that is going to require more work delving in to why I do what I do, how that makes me different, who I can best serve and what extra benefit I can bring.
The ‘Right Questions’ format is an excellent way to examine this issue and so if this is something you want to pursue further then I recommend that you read my post on What are the Right Questions for Decision Making and Strategic Planning?
If you would like to explore more decision making tools then I recommend ‘The Decision Book’: