A SWOT (strengths, weaknesses, opportunities and threats) analysis is a planning process that helps your company overcome challenges and determine which new leads to pursue.

The purpose of a SWOT Analysis is to create a synthesized view of a business’s current state. In great planning, whether strategic planning, marketing planning, operational planning – you name it, a great planning starts with an understanding of where you are today.

A SWOT Analysis is a great way to capture and frame up the current state.

• Strength – We build on our strengths.
• Weaknesses – We shore them up.

And these are your internal perspective.

• Opportunities – We invest in it or capitalize in.
• Threats – We monitor.

And these are your external perspective.

Note: Do not confuse your internal and external perspectives, 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 perspective), and what we can influence but not directly impact (external perspective).

HOW DO YOU FIGURE IT OUT?

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 to the next level is bringing data into your SWOT Analysis. There’s tons of data in organizations. Go pull in some data so you have more of a database view of what’s going on.

WHAT COULD BE YOUR DATA SOURCES?

Internal Sources: Get perspective from executives, the board if you have them, partners, and vendors. Gather those data through one on one interview of employees. Employee perspective is super important to help understand what’s working and what’s not. Same with customers. You cannot have a great SWOT analysis without understanding your customer needs, and their feedbacks. Also pull in some of your Key Performance Indicators, or simply put – your current performance over the last few years.

External Sources: Your competitors, industry study and business study. Business-focused social networks, statistics and other government sources.

WHEN SHOULD YOU PERFORM A SWOT ANALYSIS?

Before you commit to any company action, be it:

• Exploring new initiatives
• Considering opportunities to pivot
• Altering a plan midway through execution
• Revamping internal structure and policies

After you create your SWOT framework and fill out your SWOT analysis, you will need to come up with some recommendations and strategies based on the results.

These strategies should focus on leveraging strengths and opportunities to overcome weaknesses and threats.

A CRISP IDEA ON HOW YOU SHOULD BE EVALUATING THE RESULTS

• Start with your strengths – There is always room for improvement and working on your strengths, will help them remain your strengths.
• Next, look at your weaknesses – Identify where the problem is coming from so you can begin to plan to address it.
• See your threats – If any of it are related to your weaknesses and if any of them are caused by something you can change.
• Consider your opportunities – If there are any time constraints that could impact your opportunities.

SWOT ANALYSIS NEED NOT BE ALL CONCLUSIVE

Some critics feel that the tool proves to be too superficial, consequently hindering performance as outputs might be misunderstood or misused. Having only a few individuals perform the assessment increases the risk of misrepresentation of the SWOT inputs, leading to erroneous outputs. Also, SWOT captures the internal and external aspects of a single time-point. The rapidly evolving environment isn’t considered.