Strategic Planning - The Death and Resurrection of the SWOT

By Dr Kenneth J Preiss
Chairman, Corporate Outcomes Group

In the last issue of the Corporate Outcomes eNews, I addressed the question of Your Business Strategy Yesterday, Today and Tomorrow and drew your attention to the opportunity to participate in the forthcoming Strategy Game Business simulation.

Over the years experienced strategists have come to abandon the SWOT process. The conclusion is that filling in four empty boxes with a list of SWOT statements produces a meaningless output. Garbage in, garbage out!

Lets take several scenarios. In scenario one, ten Strengths, several Weaknesses and one Threat might be listed along with many Opportunities and we conclude that the business has great prospects given the internal factors (S+O) far outweigh the externals (T+W). What is invariably missed under this scenario is there might be ten Strengths and eight potentially high profit Opportunities, but the one Threat just happens to be a corporate giant that has entered your marketplace and is gorging itself on your market. With inadequate resources and the inability to raise further capital your business is dead in the water and without a lifebelt!

In scenario two, the very same Threat in a different context has a totally different impact. For example, if your company needs wads of ready cash to fend off the major intruder, and you hold more than sufficient funds to not only survive but also turn the tables on the big corporate, then the same Threat has considerably less impact. Thus, the very same variable in the two different Threat scenarios have very different weights and, thus, degree of impact. Thus, for any SWOT to be meaningful, it must be a weighted SWOT! 

Weighted SWOTs come in many forms. To borrow from another time and place, one needs to match form with function. The more complex models include a set of SWOT factors weighted across multiple key issues in the environment and the more simple just rank and weight the SWOT factors.
 
The power of the weighted SWOT is the capacity to conduct What if scenarios and modelling different scenarios over time. This capacity makes the weighted SWOT a dynamic model with the capacity to plot each SWOT factor in relative terms based on various strategy scenarios. Furthermore, and of greatest value is the real capacity to plot each SWOT factor from the critical to unimportant over the short, medium and long-term so as to prioritize the action steps.
 
The classic SWOT has been a great tool over time, probably mostly as a process to get decision-makers to think about the critical issues. However, modelling business scenarios is a must in todays more complex and competitive environment. Thus, it is time to resurrect the SWOT, use it as it was initially meant to be used (i.e. in its weighted form) and map the strategic future of your business. This is a living, breathing tool with great power to give you a lively competitive edge.

Corporate Outcomes Group has developed its own software tools specifically for use as part of the SWOT analysis in Strategic Planning assignments for clients.

For more information contact Dr Kenneth J Preiss or Adrian Cran - +61 3 9674 7282. 

The Challenge See Announcements later in this eNews

As has been stated many times elsewhere, practice makes perfect, so why not assign your managers a $90million simulated business and allow them to sharpen their strategy teeth on that, whilst at the same time assessing their performance against the best managers of the future from across the world. As you let them loose in your market place you will know they can compete if not exceed the best challenges your competitor can throw at them.

Dr Kenneth J Preiss is Chairman of Corporate Outcomes Group. Over the years he has created an operated a number of businesses. His research interests and business consulting practice is built around corporate, business and entrepreneurship strategy development and implementation. He has consulted to both large corporations and small businesses around the world and is currently on assignment in the United Arab Emirates.  He is also head of our Boston office, USA.