How to Perform a SWOT Analysis

December 4, 2019 0 By Kody Olson

Hi, I’m Erica Olsen. Today’s whiteboard session is on putting together
a SWOT analysis for your organization. SWOT simply stands for Strengths, Weaknesses,
Opportunities, and Threats, and the purpose of a SWOT analysis is to create a synthesized
view of your current state. And great planning, whether a strategic planning,
marketing planning, operational planning, you name it, great planning starts with an
understanding of where you are today, confronting the brutal facts, as Jim Collins says, so
you can build a future. And a SWOT analysis is a great way to capture
and frame up what your current state is, so I’m gonna talk to you about what it is in
a little more detail, how to put it together, and then quickly how to put it to use. Let’s jump in. Strengths, we build on our strengths. Weaknesses, we shore them up. The right-hand side of your 2×2 matrix, which
is your SWOT, is your internal perspective. On the other side, we have our opportunities,
which we invest or capitalize in, and our threats, which we monitor. External perspective. Tip number one, do not confuse your internal
and external perspective. We’re looking for a holistic view of your
organization, and it’s important to be really clear about what we can impact and directly
influence, internal, and what we can influence but not directly impact, external. And I’ll talk more about that in just a minute. So this is the structure for your SWOT. When you’re done with it, you’ll have maybe
10 to 15 bullet points in each of the four quadrants. So how do you figure out what goes in those
quadrants? The simple thing to do is to hop into a room
with a whiteboard and brainstorm with your planning team and fill out your SWOT. Taking it to the next level is bringing data
into your SWOT analysis. There’s tons of data in organizations. Absolutely go pull in some data so you have
more of a databased view of what’s going on. Let’s talk about those data sources. Internal, get perspective from executives,
board if you have them, partners, vendors. Gather that through one-on-one interviews. Employees, employee perspective is super important
to help understand what’s working and what’s not working. Customers, same thing. You cannot have a great SWOT analysis without
understanding what your customers are saying about what you’re doing well and what you’re
not doing well. And last, but certainly not least, pull in
some of your key performance indicators or very simply your current performance over
the last year, three years, five years, whatever makes the most sense. If you’re a little pressed for time, make
sure you pull in your employee perspective and your customer perspective. On the external side, same thing. What are your information sources? I like to think about external data kind of
in concentric circles, starting from the outside. Megatrends, those are those really big things
that are impacting most all organizations across our country or potentially across the
globe, aging baby boomers, growth of millennials, that type of thing. Industry, so your industry has tons of information. There’s tons of information from industry
associations, and industries have all kinds of trends that impact organizations. So check out your industry association for
reports on potential opportunities, threats, and trends in your area. Coming in a little bit closer, your market. The market comes in two flavors, your geographic
market that you serve or your target markets that you’re serving. Data sources include your economic development
organization for current market information and then Census Bureau for target market-type
information. Competitors, everybody has competitors. Understand what your top three competitors
are doing. Super important to have a holistic view of
your external perspective. Same thing, if you’re pressed for time, make
sure you get industry information and make sure you bring in competitive information
into your SWOT. If you have a little bit of budget, you can
buy reports that will make this that much richer and that much more databased. If you don’t, go with the ideas that I already
shared with you. Great. So you have all this information. What do you do with it? Synthesize it into 10 and 15 BPs, like I mentioned
before. Group them up, sub-bullet point them, that
type of thing, such that you have a pretty well-rounded SWOT. It’s nice for it to fit on one page. Like I said, you wanna be able to see your
current state, one page, 11 point font, not 7, so dial it down. There’s always more Weaknesses than there
are Threats, so take that as a rule of thumb. It doesn’t have to be perfect. Here’s tip number two. Do not confuse Weaknesses and Opportunities,
and this happens all the time. And when that happens, your SWOT falls apart. Let me explain why with an example. One theme that might come out of your work
is improving communications. Improving communications sounds like an opportunity,
right? But it’s not because our external perspective
is things we can influence but don’t directly control, and we control communication. It’s more like a weakness, but it’s not phrased
like a weakness. So it needs to live in this quadrant, and
if you have a lot of things like that, you might reconsider renaming this quadrant Areas
of Improvement. And if you do that, then just make sure that
all the bullet points in this area are phrased that same way, improve communications. If you wanna keep it as Weakness, change it
to lack of communication and then you have a statement that sounds like a weakness. So why is this important? When you process out your SWOT — and we have
a whole video on that, so go check that out — but really quickly, when you process out
your SWOT, you’re gonna wanna start with Opportunities, and this is your growth area. Planning is about growth. If you have stuff in here that isn’t about
growth, the SWOT doesn’t work. So Opportunities are growth goals. That’s what you do with those. Threats, most of the time, you don’t turn
into goals. You merely watch them, maybe an initiative
or two, but most of the time you’re watching them. Under Weaknesses, these are gonna turn into
your operational and people goals and initiatives. And last, but certainly not least, your Strengths
are a source of your competitive advantage or a starting point to identify them. We have a whole video on that, so check that
out to identify your competitive advantages. Last tip, whatever you do, do not go through
the exercise of putting your SWOT together and then not use it. We see that all of the time. Great planning starts with understanding where
you are today. This is how you do that. Make sure you use it to build out your goals
and your competitive advantages. That’s all we have for today. Thanks for tuning in. Check out our channel. Happy strategizing.